Daily Brief Health Care: Singapore Medical, WuXi AppTec Co. Ltd. and more

In today’s briefing:

Singapore Medical’s VGO: Acceptances at 77.37%, Closing Date Now 15 Nov
Singapore Medical Extends Offer As Tendering Surprises
WuXi AppTec (603259.CH/2359.HK) 22Q3- It’s Too Early to Think That The Past Rapid Growth Has Resumed

Singapore Medical’s VGO: Acceptances at 77.37%, Closing Date Now 15 Nov

Singapore Medical (SMG SP)‘s voluntary conditional offer from management (chairman, CEO, exec director) has received acceptances of 77.37% of outstanding shares, below the 90% minimum acceptance condition.
The closing date has been extended to 15 November. To hit the 90% minimum acceptance condition, the offeror requires a 55.8% acceptance rate from the remaining holdout minorities.
The IFA previously declared the offer “not fair but reasonable.” The gross spread of 1.4% is not an attractive risk/reward profile. We continue to recommend taking profits.

Back on the 14 September, healthcare provider Singapore Medical (SMG SP) announced a voluntary MBO from TLW at S$0.37/share. The IFA concluded the Offer was “not fair but reasonable”.
The Offer is conditional on 90% of shares out held by the Offeror, and the TLW shareholders plus irrevocables hold 51.67% all-in. This 90% conditionality is firm.
As of the first close, TLW now has 77.37%. The Offer has been extended by a fortnight. The Offer price has NOT been declared final.

WuXi AppTec’s 2022Q3 results beat the market expectations. The Company’s performance showed good recovery from the prior pandemic/lockdown, but it has not yet entirely reversed the trend of slowing growth.
Wuxi AppTec has a problem of decreasing future gross margins. Although the Q3 results could bring short-term catalyst for WuXi AppTec’s share price, such rebound may not last long.
We further analyzed WuXi AppTec’s business, and we remain to be conservative on the Company, because the whole outlook and investment logic of CXO have changed.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network