Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

iClick Interactive Asia Group / Event-Driven

In recent years,  it has become common practice for Chinese "tech" companies listed in the US to be privatised, on the expectation of being relisted on the Mainland (where often higher multiples are assigned) or Hong Kong. Following the passing of the <a href="https://en.wikipedia.org/wiki/Holding_Foreign_Companies_Accountable_Act" target="_blank" rel="noopener">Holding Foreign Companies Accountable Act</a> last year, there is an added impetus to take these companies private. Or at the very least, seek a dual listing in Hong Kong.
More often than not, these takeovers are initiated by the controlling shareholders. Which makes this latest non-binding proposal for <a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> a little unusual.
iClick <a href="https://ir.i-click.com/2021-09-24-iClick-Interactive-Asia-Group-Limited-Announces-Receipt-of-a-Preliminary-Non-Binding-Indicative-Proposal-to-Acquire-the-Company" target="_blank" rel="noopener">announced</a> on the 24 September it had received a preliminary indicative proposal from PAG Pegasus Fund and Oasis Management to acquire all of its outstanding shares for US$6.75 per ADS, in cash.
That's a 19% premium to last close, yet 63% below its all-time high close of US$18.30 in February last year, and 16% below its $8/share IPO price in December 2018.
Should a firm Offer unfold, this long-form merger would require two-thirds majority approval from all shareholders.
Sammy Hsieh, the chairman of the board of directors and co-founder, Jian Tang, iClick's CEO, and co-founder, collectively own 4,385,078 Class B ordinary shares, which due to their super-voting rights, is equivalent to ~62% of the voting power. This proposal is a non-starter without the support of either Hsieh or Tang.
In addition, <a href="https://www.smartkarma.com/entities/baozun" target="_blank" data-smartkarma-citation="entities:29712:1" rel="noopener">Baozun (9991 HK)</a> controls a further 10% of the voting power. Should all three side with the buyer consortium, this deal is done. 
But I doubt this will be the outcome. A more likely scenario is the consortium's low-balled Offer is a means to triggering a response from a key player, such as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, to make a counteroffer.
More below the fold.

In recent years,  it has become common practice for Chinese "tech" companies listed in the US to be privatised, on the expectation of being relisted on the Mainland (where often higher multiples are assigned) or Hong Kong. Following the passing of the Holding Foreign Companies Accountable Act last year, there is an added impetus to take these companies private. Or at the very least, seek a dual listing in Hong Kong.
More often than not, these takeovers are initiated by the controlling shareholders. Which makes this latest non-binding proposal for iClick Interactive Asia Group (ICLK US) a little unusual.
iClick announced on the 24 September it had received a preliminary indicative proposal from PAG Pegasus Fund and Oasis Management to acquire all of its outstanding shares for US$6.75 per ADS, in cash.
That's a 19% premium to last close, yet 63% below its all-time high close of US$18.30 in February last year, and 16% below its $8/share IPO price in December 2018.
Should a firm Offer unfold, this long-form merger would require two-thirds majority approval from all shareholders.
Sammy Hsieh, the chairman of the board of directors and co-founder, Jian Tang, iClick's CEO, and co-founder, collectively own 4,385,078 Class B ordinary shares, which due to their super-voting rights, is equivalent to ~62% of the voting power. This proposal is a non-starter without the support of either Hsieh or Tang.
In addition, Baozun (9991 HK) controls a further 10% of the voting power. Should all three side with the buyer consortium, this deal is done. 
But I doubt this will be the outcome. A more likely scenario is the consortium's low-balled Offer is a means to triggering a response from a key player, such as Tencent (700 HK), to make a counteroffer.
More below the fold.

Hollysys Automation Technologies (HOLI US)

IClick(ICLK US): PAG & Oasis Shake The Trees