In today’s briefing:
- Mandarin Oriental (MAND SP): Matheson’s Full Offer
- Merger Arb Mondays (20 Oct) – ENN Energy, Joy City, Kangji, Mandarin, Soft99, Mandom, Makino
- Sany Heavy (6031 HK) IPO: Big Cornerstone Allocation to Delay Global Index Inclusion
- Larvotto Resources (LRV AU): USAC’s Friendshoring NBIO
- Weekly Deals Digest (19 Oct) – Mayne, Soft99, Mandom, Kangji, Mandarin Oriental, Genting Malaysia
- BBVA–Sabadell: Deal Fails Decisively — Institutional and Governance Friction Ends 17-Month Saga
- Ampol Ltd (ALD) SL Hybrid, Trade the FY25 Disclosure Window
Mandarin Oriental (MAND SP): Matheson’s Full Offer
- A sale – partial or otherwise – of Mandarin Oriental International (MAND SP)‘s One Causeway Bay (OCB) was always on the cards. But I didn’t see an Offer coming.
- Concurrent with the sale of 13 floors of OCB to Alibaba (9988 HK), Jardine Matheson (JM SP) is seeking to take out MAND’s minorities at US$3.35/share by way of a Scheme.
- That’s a 52.3% premium to undisturbed, and a 53.7% premium to NAV. Unlike the 2021 Jardine Strategic (JS SP) Offer, Matheson is required to abstain from voting on this takeover.
Merger Arb Mondays (20 Oct) – ENN Energy, Joy City, Kangji, Mandarin, Soft99, Mandom, Makino
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Mandarin Oriental International (MAND SP), Smart Share Global (EM US), Soft99 Corp (4464 JP), ENN Energy (2688 HK), Mayne Pharma (MYX AU), Dongfeng Motor (489 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Mandom Corp (4917 JP), Humm Group (HUM AU), Seven West Media (SWM AU), Toyota Industries (6201 JP).
Sany Heavy (6031 HK) IPO: Big Cornerstone Allocation to Delay Global Index Inclusion
- Sany Heavy Industry (600031 CH) could raise up to HK$16.35bn (US$2.1bn) in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
- There is a big allocation to cornerstone investors that is locked up for 6 months. That eliminates the already small possibility of Fast Entry inclusion to global indexes.
- Sany Heavy (6031 HK) should be added to Southbound Stock Connect from the open of trading on 24 November following the end of the Price Stabilisation period.
Larvotto Resources (LRV AU): USAC’s Friendshoring NBIO
- In Friendshoring Aussie Rare Earths, I flagged the possibility of the US taking equity stakes in Australian processing projects, as a means towards securing a supply of critical minerals.
- Larvotto Resources (LRV AU), an explorer/evaluator/developer of gold and antimony, has now announced a NBIO from United States Antimony (UAMY US) (USAC) @ A$1.40/share, a 87.67% premium to undisturbed.
- USAC has also declared a 10% holding. An independent board committee is assessing the approach. Due diligence has not yet been granted. That should be forthcoming.
Weekly Deals Digest (19 Oct) – Mayne, Soft99, Mandom, Kangji, Mandarin Oriental, Genting Malaysia
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: JST Group (6687 HK) and FineToday Holdings (420A JP) IPOs; Sany Heavy Industry (600031 CH) H Share listing.
- Event-Driven developments: Mayne Pharma (MYX AU),Soft99 Corp (4464 JP), Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK), Mandarin Oriental International (MAND SP), Genting Malaysia (GENM MK).
BBVA–Sabadell: Deal Fails Decisively — Institutional and Governance Friction Ends 17-Month Saga
- The BBVA-Sabadell offer failed with <30% acceptance, as institutional and retail shareholders decisively rejected the all-stock, no-premium structure.
- Our long SAB / short BBVA trade worked tactically near expiry, as the market rewarded standalone value and capital flexibility.
- The outcome reinforces that hostile, low-premium, all-share deals rarely succeed in Europe — governance, sentiment, and structure matter as much as price.
Ampol Ltd (ALD) SL Hybrid, Trade the FY25 Disclosure Window
- Trade call: Long the 2022 SL hybrid. Price in a likely SPT 1 miss, capture optionality around 101% redemption and the post-disclosure vendor lag.
- Miss risk: F&I intensity must fall about 5.4% from 2024 to meet the 2021 minus 5% SPT. Operational mix makes that hard.
- Catalyst path: Two windows. Pre-disclosure, trade miss probability. Post-disclosure, arbitrage the convergence until data vendors update.
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