IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Today’s <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> monthly update notes that I Squared has completed due diligence and is finalising the terms of a possible preconditional offer. </li>
<li>The I Squared bid will likely be a modest premium to the China Mobile offer with a 50% minimum tendering condition. The key unknown is securing regulatory approvals. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it is likely to match terms. </li>
</ul>


Today’s HKBN Ltd (1310 HK) monthly update notes that I Squared has completed due diligence and is finalising the terms of a possible preconditional offer. 
The I Squared bid will likely be a modest premium to the China Mobile offer with a 50% minimum tendering condition. The key unknown is securing regulatory approvals. 

China Mobile (941 HK) will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it is likely to match terms. 


HKBN (1310 HK): I Squared Inches Closer to a Competing Offer

<ul>
<li>A new <a href="https://std.stheadline.com/realtime/article/2058629/%E5%8D%B3%E6%99%82-%E8%B2%A1%E7%B6%93-%E9%A6%99%E6%B8%AF%E5%AF%AC%E9%A0%BB%E8%B3%A3%E7%9B%A4%E8%86%A0%E7%9D%80%E9%80%BE3%E5%80%8B%E6%9C%88-%E6%B6%88%E6%81%AF-%E8%82%A1%E6%9D%B1%E9%80%80%E5%87%BA%E9%9C%80%E6%B1%82%E5%BC%B7%E7%83%88-%E4%B8%80%E6%97%A6%E8%A7%B8%E7%A4%81-%E6%9C%AA%E4%BE%86%E4%BD%9C%E5%83%B9%E5%8B%A2%E6%9B%B4%E4%BD%8E" target="_blank" rel="noopener">Sing Tao Daily article</a> on <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> claims that <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a>’s offer is a stalemate, and a potential I Squared offer faces regulatory challenges. </li>
<li>The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high probability of a competing offer from I Squared. </li>
<li>Last Friday, MBK converted its vendor loan notes (VLN) into shares, which could signal that an I Squared competing offer is imminent. </li>
</ul>


A new Sing Tao Daily article on HKBN Ltd (1310 HK) claims that China Mobile (941 HK)’s offer is a stalemate, and a potential I Squared offer faces regulatory challenges. 
The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high probability of a competing offer from I Squared. 
Last Friday, MBK converted its vendor loan notes (VLN) into shares, which could signal that an I Squared competing offer is imminent. 


HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" rel="noopener">HKBN Ltd (1310 HK)</a> shares declined 4.4% after a <a href="https://std.stheadline.com/daily/article/2657779/%E6%97%A5%E5%A0%B1-%E8%B2%A1%E7%B6%93-%E4%B8%AD%E7%A7%BB%E5%8B%95%E8%B3%BC%E9%A6%99%E6%B8%AF%E5%AF%AC%E9%A0%BB%E6%81%90%E8%A7%B8%E7%A4%81" target="_blank" rel="noopener">Sing Tao Daily article</a> claimed that the precondition satisfaction of <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a>’s offer is at a stalemate. </li>
<li>The mainland regulatory authorities have not provided any feedback on the approval process. The <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a> deal break is cited as a cautionary tale.</li>
<li>While the China TCM deal break taught us that no deal is safe, even an SOE-sponsored deal, the article's concerns have little merit. This is a buy.</li>
</ul>



HKBN Ltd (1310 HK) shares declined 4.4% after a Sing Tao Daily article claimed that the precondition satisfaction of China Mobile (941 HK)’s offer is at a stalemate. 
The mainland regulatory authorities have not provided any feedback on the approval process. The China Traditional Chinese Medicine (570 HK) deal break is cited as a cautionary tale.
While the China TCM deal break taught us that no deal is safe, even an SOE-sponsored deal, the article's concerns have little merit. This is a buy.


HKBN (1310 HK): A Press Report Causes Trepidation

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>'s preconditional voluntary conditional offer from <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> is HK$5.23. Including the HK$0.165 dividend, the total offer is HK$5.395, an 11.0% premium to last close.</li>
<li>The offer seems rushed and a reaction to a potential competing offer from I Squared. The lack of privatisation through a scheme and MBK's irrevocable suggest the offer is light.   </li>
<li>An unattractive offer, a lengthy precondition long-stop date and the irrevocable competing offer clause invite I Squared to enter the fray. </li>
</ul>



HKBN Ltd (1310 HK)'s preconditional voluntary conditional offer from China Mobile (941 HK) is HK$5.23. Including the HK$0.165 dividend, the total offer is HK$5.395, an 11.0% premium to last close.
The offer seems rushed and a reaction to a potential competing offer from I Squared. The lack of privatisation through a scheme and MBK's irrevocable suggest the offer is light.   
An unattractive offer, a lengthy precondition long-stop date and the irrevocable competing offer clause invite I Squared to enter the fray. 


HKBN (1310 HK): China Mobile’s Half-Baked Preconditional VGO

<ul>
<li>Bloomberg <a href="https://www.businesstimes.com.sg/companies-markets/telcos-media-tech/china-mobile-said-explore-deal-internet-provider-hkbn" target="_blank" rel="noopener">reports</a> that <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> is exploring a buyout of <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> and is willing to pay at least HK$5.00, a 16.0% premium to last close.  </li>
<li>HKBN has been the subject of numerous bid rumours, which seemingly came to nothing due to the challenge of meeting the largest shareholders' (TPG and MBK) price expectations. </li>
<li>The rumoured offer price will struggle to gain TPG/MBK’s backing. The current valuation is unappealing, as HKBN trades at a premium multiple compared to peers at the last close. </li>
</ul>


Bloomberg reports that China Mobile (941 HK) is exploring a buyout of HKBN Ltd (1310 HK) and is willing to pay at least HK$5.00, a 16.0% premium to last close.  
HKBN has been the subject of numerous bid rumours, which seemingly came to nothing due to the challenge of meeting the largest shareholders' (TPG and MBK) price expectations. 
The rumoured offer price will struggle to gain TPG/MBK’s backing. The current valuation is unappealing, as HKBN trades at a premium multiple compared to peers at the last close. 


HKBN (1310 HK): China Mobile Resurfaces as a Rumoured Suitor

United States

TPG Inc is a global alternative asset management firm. The Company invests across various multi-product platforms such as capital, growth, impact real estate, an market solutions. TPG serves clients worldwide.

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HKBN (1310 HK): I Squared Inches Closer to a Competing Offer

China Mobile will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it...

Arun George

HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion

The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high...

Arun George

HKBN (1310 HK): A Press Report Causes Trepidation

The article's concerns have little merit at this process stage. There is a medium-to-high probability of a competing offer. The selloff is a buying...

Arun George

HKBN (1310 HK): China Mobile’s Half-Baked Preconditional VGO

An unattractive offer, a lengthy precondition long-stop date and an irrevocable competing offer clause are invitations for competing offers. The...

Arun George

HKBN (1310 HK): China Mobile Resurfaces as a Rumoured Suitor

Bloomberg reports that China Mobile is exploring a buyout of HKBN and is willing to pay at least HK$5.00. The rumoured offer price will struggle to...

Arun George

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