In today’s briefing:
- OneConnect (6638 HK/OCFT US): Ping An’s Offer Gets The Nod From SAMR
- The HLB Merger Swap Turned into a Messier Trading Setup with Layered Dynamics in Play
- New World Resources (NWC AU): Kinterra Tweaks Its Offer Structure and Bumps
- China Medical System (867 HK): SGX Secondary Listing Benefits Questionable
- CIE Partial Tender Fizzles – No Proration, Bullish Signal
- Johns Lyng (JLG AU): PEP’s A$4/Share Offer Looks Light
OneConnect (6638 HK/OCFT US): Ping An’s Offer Gets The Nod From SAMR
- On the 15th May, dual-listed Oneconnect (6638 HK/OFT US), a digital retail banking/commercial banking/digital insurance play, announced a firm Scheme Offer from Ping An, OneConnect’s controlling shareholder.
- Ping An is offering HK$2.068/share, or US$7.98/ADS, a 72.33% premium to last close, and a 131.66% premium to the 30-day average. Net cash is, however, ~HK$1.83/share. The price is final.
- SAMR has now signed off on the deal, satisfying the pre-condition. We await directions from the Cayman court on timing. I’m estimating late-September payment. Should the deal get up.
The HLB Merger Swap Turned into a Messier Trading Setup with Layered Dynamics in Play
- Street’s wrongly assuming only 1% of total shares can exercise appraisal rights, but under Korean law, pre-meeting dissent suffices — today’s vote tells us nothing about actual buyback risk.
- Focus is on pre-dissent size — local checks point to 20% of SO, 4x the 40B KRW cap. With stock 40% below appraisal price, merger break risk looks real.
- Market’s treating deal break as bearish, deterring some from exercising appraisal despite being in the money. With spread this wide, swap leg offers high-risk, high-reward setup worth watching.
New World Resources (NWC AU): Kinterra Tweaks Its Offer Structure and Bumps
- Kinterra increased its New World Resources (NWC AU) offer to A$0.063, which will be increased to A$0.064 and declared unconditional if Kinterra acquires 30% of voting rights by 11 July.
- Central Asia Metals (CAML LN) has five business days to match Kinterra’s offer. While CAML today lowered its FY2025 production guidance, it retains the headroom to return with revised terms.
- Trump’s recent copper tariffs support the case for the ongoing bidding war. Crucially, none of the bidders has declared their offer best and final.
China Medical System (867 HK): SGX Secondary Listing Benefits Questionable
- On the 24th June 2025, specialty pharmaceutical play China Medical System (867 HK) (CMS) announced a proposed secondary SGX listing, by way of introduction. No equity fundraising will occur.
- The SGX has given the green light, with shares expected to commence trading on the 15th July.
- This secondary listing is not, it would seem, a pre-cursor to an HKEx withdrawal; but to “enhance the [CMS’s] global visibility, thereby facilitating its international business expansion“.
CIE Partial Tender Fizzles – No Proration, Bullish Signal
- CIE’s €24/share partial offer closed with just 9.8% uptake, suggesting investors see more value ahead. No proration required. Treasury shares may support future free float improvements.
- The weak subscription outcome aligns with our DCF-based fair value of €31–33/share. Market consensus also points to €32, underscoring material undervaluation and long-term upside potential.
- Strong fundamentals, 4.0% yield, and attractive peer comps reinforce the case. Investors chose to stay long, confirming confidence in CIE’s strategic direction, liquidity plans, and re-rating potential.
Johns Lyng (JLG AU): PEP’s A$4/Share Offer Looks Light
- A month ago, Integrated building services provider Johns Lyng (JLG AU) fielded a non-binding Offer, by way of a Scheme, from Aussie fund manager Pacific Equity Partners (PEP).
- JLG and PEP have now entered into a SID at A$4/share, a 77% premium to undisturbed. CEO Scott Didier, JLG’s largest shareholder with 17.64%, is supportive.
- A shareholder vote is expected to take place in October, with the transaction potentially wrapping up in November. This may need more gruel.
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