IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

MergerTalk: Intriguing US Merger Spreads-A 23% Spread, But Odds on 51job.com Privatization Completes

51job’s Privatisation Spread Risk/Reward

MergerTalk: Thoughts On Today's Disclosure-Why It Is Not The Deal Killer The Market May Think It Is

Uncompromised, Independent, Conflict-Free Research

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

<p><a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> has entered into a definitive agreement for a privatisation transaction at $79.05 in cash per ADS. The offer price is a premium of 25.38% to the VWAP during the last 30 days and an 18.82% premium to the VWAP during the last 30 days preceding the original proposal (on 17 September 2020).</p><p>As a reminder, on 17 September 2020, 51job announced a non-binding privatisation proposal from DCP Capital Partners, a PE firm in Asia, at $79.05 in cash per ADS. On 4 May 2021, the proposal was updated by disclosing the formation of an initial consortium consisting of DCP, Ocean Link Partners and Mr Rick Yan, the CEO since 2000. The offer price remained unchanged. Today's announcement notes that <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a>, the largest shareholder which represents 34.8% of outstanding shares, has joined the consortium. </p><p>The privatisation price is not a knockout bid and is a modest premium to historical VWAPs over a 3-years and 1-year time period. Some shareholders may be reticent about accepting the bid given the stonking share price performance of peer, <a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a>, which is trading almost 2x its IPO price. However, we note that the privatisation offer is attractive in the context of 51job’s forecasted growth (PEG basis). Nevertheless, for shareholders seeking to be paid the fair value of their shares, dissenter rights are available.  </p><div class="content-highlight"><p>As 51job is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Rick Yan, Recruit and certain other existing shareholders have agreed to vote their shares, which represent 54.9% of the voting rights, in favour of the privatisation deal. We think that this level of support should be enough to get past the two-thirds shareholder approval threshold. </p></div>

51 Job Inc Adr (JOBS US) has entered into a definitive agreement for a privatisation transaction at $79.05 in cash per ADS. The offer price is a premium of 25.38% to the VWAP during the last 30 days and an 18.82% premium to the VWAP during the last 30 days preceding the original proposal (on 17 September 2020).As a reminder, on 17 September 2020, 51job announced a non-binding privatisation proposal from DCP Capital Partners, a PE firm in Asia, at $79.05 in cash per ADS. On 4 May 2021, the proposal was updated by disclosing the formation of an initial consortium consisting of DCP, Ocean Link Partners and Mr Rick Yan, the CEO since 2000. The offer price remained unchanged. Today's announcement notes that Recruit Holdings (6098 JP), the largest shareholder which represents 34.8% of outstanding shares, has joined the consortium. The privatisation price is not a knockout bid and is a modest premium to historical VWAPs over a 3-years and 1-year time period. Some shareholders may be reticent about accepting the bid given the stonking share price performance of peer, Kanzhun (BZ US), which is trading almost 2x its IPO price. However, we note that the privatisation offer is attractive in the context of 51job’s forecasted growth (PEG basis). Nevertheless, for shareholders seeking to be paid the fair value of their shares, dissenter rights are available.  As 51job is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Rick Yan, Recruit and certain other existing shareholders have agreed to vote their shares, which represent 54.9% of the voting rights, in favour of the privatisation deal. We think that this level of support should be enough to get past the two-thirds shareholder approval threshold. 

51 Job Inc Adr

51job Enters into a Definite Agreement