Brief M&A: (Mostly) Asia M&A: March 2020 Roundup and more

In this briefing:

  1. (Mostly) Asia M&A: March 2020 Roundup
  2. Clear Media: Done Deal From Alibaba & Co.
  3. SET50 Rebalance Preview: Early Bird Special
  4. Yixin Supported By Indicative Chain Principle Price
  5. Toshiba Machine – Shareholders Side With Management and In This Case So Do We

1. (Mostly) Asia M&A: March 2020 Roundup

For the month of March, 11 new deals were discussed on Smartkarma with an overall announced deal size of ~US$14bn.

Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow up discussions, or simply click on the insight link(s) below the name.

New Deals


Size (US$bn)



Liquefied Natural Gas (LNG AU) Gas0.1Off-market72%
LNGL (LNG AU): An Unhappy Ending
Zenith Energy Ltd/AU (ZEN AU) Power Gen0.1Scheme45%
Zenith Energy’s Offer From Pacific Equity
Shanghai Pudong Road (600284 CH) Construction0.1Partial14.6%
Shanghai Pudong’s Partial Offe
Hong Kong
CGN New Energy Holdings (1811 HK) Energy2.0Scheme
CGN New Energy: The Latest SOE Clean Energy Play
Clear Media Ltd (100 HK) Advertising0.5Vol offer50.2%
Clear Media: Done Deal From Alibaba & Co.. Read more: 
Li & Fung Ltd (494 HK) Apparel0.9Scheme150%
Li & Fung: Privatisation Offer. Read more: 
Zhuhai Holdings Investment (908 HK) Ports/Ferries0.1MGO1%
Zhuhai Holdings: SOE Offer For Tourist Play
Hitachi Chemical (4217 JP) Chemicals9.0Tender Offer100%
Hitachi Chem Tender Launch Will Make Arbs Happy
Sakura Sogo Reit (3473 JP) REIT0.3Absorption merger
Sakura Sogo REIT Merger Attractive, Trading Wide
Boardtek Electronics (5349 TT) PCB0.2Share swap
BoardTek: Taiwan Scrip Deal Trading Through Terms
Huntsworth (HNT LN) Healthcare0.5Scheme50%
Huntsworth: All-Cash Friendly Deal Now Trading Wide
Source: Smartkarma Insights

CGN New Energy Holdings (1811 HK) is an indicative Scheme. No price has been announced.

The above does not include: numerous insights (Reality Check 2020: Did CP All Really ‘Win’ the Tesco Deal?Thai Retail – Life After the Tesco Lotus Sale?Is CPALL’s Win a Bigger Win for Berli Jucker?, amongst others) written on Charoen Pokphand Group’s deal to buy 86.9% of Tesco PLC (TSCO LN)‘s Thailand operations and 100% of its Malaysian business for US$10.58bn; the rumoured US$4bn bid from Blackstone for Soho China Ltd (410 HK), (SOHO China Suspended Ahead Of Possible Blackstone Bid); and what appears to be a delisting offer for Elec & Eltek International Co (1151 HK) (Elec & Eltek: An Exit/Delisting Offer?).

The average premium for the new deals announced in March was ~60% and the YTD average premium for all deals discussed on Smartkarma is 36%.

The average for all deals discussed on Smartkarma in 2019 (145 all-in) was 31.5%.

Brief Summary of News in March of Arb Situations On Smartkarma’s Radar

(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation. Where a new insight was written on these names in June, I’ve included a link to that insight in italics.)


Comments (with links to announcements and insights)

16-March: AOF announced it has received the Bidder’s Statement from Starwood for its A$2.98/unit Offer.

20-Mar: Starwood has pulled out of its tilt for AOF.  “Starwood does not intend to despatch the Bidder’s Statement to AOF unitholders in reliance on section 670F of the Corporation Act 2001 (Cth)” citing also the fact that the SIA had seen a breach of conditions with a refinancing conducted.

12-Mar: In a refiner margin update, Caltex said it not yet able to see any clear impacts on demand in the Australian gasoline and diesel markets related to the virus.

19-Mar: According to the AFR, Alimentation Couche-Tard (ATD/A CN) is keen on pursuing a takeover of Caltex but has hinted that the crash in the equity markets may warrant a reduction in the price.

12-Mar: HLS announced that it has not finalised a response to Partners indicative Offer.

16-Mar: HLS surprisingly announced (after consultation with its major shareholders) that it has rejected Partners indicative Offer.

19-Mar: Scheme passes

18-Mar: Ramelius achieves 50% – Offer unconditional.


Comments (with links to announcements)

16-March: SRBC’s major shareholder has bumped the partial Offer price to RMB4.06/sjare from RMB3.51/share. All other content remains the same.  Shareholders who have previously accepted the offer, are offered at the adjusted price of RMB4.06/share.

Hong Kong

Comments (with links to announcements and insights)

6-Mar:  AVIC now unconditional in all respects after achieving the 90% acceptance condition. 92.92% to be exact – and that includes 2.14% bought by the Offeror. The last trading day was the 11 March.
No March update
6-Mar: China Agri’s independent shareholders overwhelmingly approved the Scheme. The effective is expected to be the 19 March, the withdrawal from listing on the 23rd (9am) and payment on the 30 March.
16-Mar:In its monthly announcement in compliance with the Takeovers Code, Haier said the Offeror continues to explore a [privatiastion proposal. 

12-Mar: Leyou now announced that Luk Kwok Cheung Charles had entered into an exclusivity agreement with iDreamsky.
31-Mar: The Hong Kong Economic Times and other media sources are reporting that CVC Capital Partners and iDreamsky Technology Limited (1119 HK) are considering to lower the proposal for Leyou. 

6-Mar: Yixin announced DD in regards to the US$16/share Offer from Tencent Holdings (700 HK), Hammer Capital for Bitauto Holdings Ltd Adr (BITA US) is ongoing.
Yixin Supported By Indicative Chain Principle Price


Comments (with links to insights)

5-Mar: Bangkok Bank Public (BBL TB)‘s shareholders approve the deal. The OJK commissioner for banking supervision, Heru Kristiyana, who said that Bangkok Bank was granted approval.
Permata Significantly De-Risked After Approvals from Bangkok Bank EGM and Maybe the OJK
No Mar update


Comments (with links to announcements and insights)

18-Mar: The company lowered its full year net profit forecast
19-Mar: Murakami-san’s C&I Holdings increased its stake in Excel and the group holders now hold 39.69%. 
No Mar update
No Mar update
19-Mar: Updated Large Shareholder Filing
No Mar update
20-Mar: The Result for the Tender Offer has been filed. It is 85.70% owned by Amase Create – the vehicle now majority owned by the son. That means an EGM to approve a consolidation of the shares, and a cash-out in a few months. 
18-Mar: Delisted.
No March update
11-Mar: The result of the  Tender Offer was announced. The bidder, BCPE Planet Cayman, L.P., now owns 30.1534mm shares or 92.45%. That should precipitate a move to delist and squeeze out minorities at an early date. 
Cash settlement of the Tender Offer is 17 March.
18-Mar: Delisting plan announcement; trade on 4/22.
No news
26-Mar: This deal has completed with 27,172,702 shares tendered which gets PSM to 88.6% of shares out and 90.77% of voting rights. That means that as per Article 179 of the Companies Act, the Special Controlling Shareholder will execute a “Demand for Cash Out” and the Board of the Target is expected to agree (as per previous comment) and so the shares will be bought out with all due haste. 

27-Mar:  Shareholders pass takeovers measures. Chalk one up for the non-economically-minded.

30-Mar: Toshiba Machine – Shareholders Side With Management and In This Case So Do We

24-Mar:  The company sold some land and parking lot area in western Tokyo (just north of Tachikawa) and earned a profit of JPY 1.8bn.


Comments (with links to announcements)

27-Mar: Spread has fallen to 1.78% at the close of the Offer. Shares to be suspended on the 6 April. 

No Mar update

New Zealand

Comments (with links to announcements and insights)

14-Mar: Augusta Capital – Shareholders Have Options

26-Mar: Aug announced that it has been notified by Centuria Capital (CNI AU) that it is terminating the bid implementation agreement announced on 29 January 2020 and will not be proceeding with the takeover bid at this time.

15-Mar: Metlifecare confirmed the SIA with EQT contains limited termination events and does not include any market fall or force majeure termination event.

16-Mar: Metlifecare/EQT: Avoiding Contractual Obligations



No Mar update


Comments (with links to announcements and insights)

9-Mar: The Offer Doc is out. The IFA opinion will be dispatched within 14 days. The first closing date is the 6 April.

24-Mar: The IFA considers the Offer for Bread to be fair and reasonable. Acceptances must be received by the 6 April – or such later date as may be announced. 

No Mar update
11-Mar: Both Frasers Logistics & Industrial (FLT SP) and FCOT shareholders approved this combination.



No Mar update



26-Mar: Bangkok Dusit Med Service (BDMS TB) delayed their AGM to evaluate the impact of COVID-19 and consider and evaluate whether it is still appropriate to make the offer for BH TB
No Mar update



2-Mar: Offer completed

2. Clear Media: Done Deal From Alibaba & Co.

Image 73571306121585616025767

After four months of negotiation, a firm Offer for Clear Media Ltd (100 HK) has been announced.

In my short-lived insight yesterday (Clear Media: Will Minorities Now Get Robbed?), I discussed that on the 29 November last year, Clear announced that its controlling shareholder, Clear Channel Outdoor Cl A (CCO US), with 50.91% of the company, was conducting a strategic review of its stake.

This was followed by the standard monthly updates pursuant to the Takeovers Code, until yesterday, when Clear was suspended pending the release of an announcement under the Takeovers Code.

This morning Clear-management-lead Ever Harmonic has made a voluntary cash offer for Clear at HK$7.12/share, a 50.21% premium to the last close of HK$4.74, but more like a 78% premium if using my estimated undisturbed price back in late November.

CCO has given an irrevocable to tender in their 50.91% holding. The Offer is conditional on 50.1% acceptances.

The Offer Price is Final. Dividends declared will be netted. Clear has not declared any dividends at the time of this Offer announcement.

More below the fold.

3. SET50 Rebalance Preview: Early Bird Special


The Stock Exchange of Thailand (SET) will announce the results of the semi-annual review of the SET50 index in June and the changes will be effective from 1 July 2020. Passive funds and index arb desks will need to trade at (or by) the close on 30 June 2020.

We see a high probability of TTW Pcl (TTW TB) being added to the SET50 index in this review and Banpu Public (BANPU TB) being excluded. We also see a low probability of Kiatnakin Bank (KKP TB) being included and WHA Corp Pcl (WHA TB) being excluded.

These names could move around since we are only a third of the way through the review period of the market cap.

This Insight covers the SET50 index methodology, our expected changes, historical impact on additions/deletions to the index and suggested trades for this rebalance.

4. Yixin Supported By Indicative Chain Principle Price

Image 94807787541585567588989

Back on the 13 September last year, Tencent Holdings (700 HK) and Hammer Capital tabled a preliminary non-binding proposal for Bitauto Holdings Ltd (BITA US) at US$16/ADS, a ~20.6% premium to last close and a 36.1% premium to the 30-day VWAP. The proposal has the backing from shareholders holding 48.5%, including Inc (ADR) (JD US)‘s 25.1% stake via JD Financial. Tencent currently holds 7.81%.

BITA owns ~43.74% of shares out in Yixin Group Ltd (2858 HK). Tencent holds 20.59%, 10.74%, and Hammer 1.48%. Should the BITA proposal complete, there will be a change in statutory control in Yixin, obligating Tencent to make an unconditional mandatory general offer.

Which all sounds quite promising for Yixin. However, proposals under Hong Kong’s chain principle rarely offer a compelling offer for the downstream entities. And despite a recent revision to this calculation, that still remains the case for Yixin. But it does provide an indicative floor on pricing. 

Quiddity’s Quiddity Hong Kong M&A Guide 2019 contains guidelines to the relevant rules, regulations, documentation, and pointers to the Hong Kong M&A landscape.

5. Toshiba Machine – Shareholders Side With Management and In This Case So Do We

Image 57973788051585570696786

On Friday it was announced that 62% of Toshiba Machine shareholders had approved the company’s takeover defence measures against Yoshiaki Murakami’s Office Support and related entities. The stock fell as much as 13.8% on the news before eventually closing about 7.7% below where it was trading prior to the announcement that the takeover defence had been approved. In this case, however, we actually feel that the company’s strategy may play out better for investors in the long-term and we consider the result to be relatively rational. We discuss some of the idiosyncrasies of the deal and the long-term plan for Toshiba Machine below.

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