Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Waste Management Buying Advanced Disposal Services – A Rubbish Deal or Cash from Trash?

Advanced Disposal Services/Waste Management – Draft Merger Proxy Filing Details

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/17010" target="_blank" data-smartkarma-citation="entities:17010:1">800 super holdings (ESH SP)</a>, a provider of waste management, cleaning, and conservancy services, has <a href="https://links.sgx.com/FileOpen/Offer%20announcement.ashx?App=Announcement&amp;FileID=557922" target="_blank">received</a> a privatisation Offer from KKR by way of a Voluntary Conditional Offer of $0.90/share or a 16.1% premium to last close and 30.6% to the 1-month VWAP. The Offer price will not be increased.
The Lee Family - the "promoters" and deemed joint Offerors under Rule 10 of the <a href="http://www.mas.gov.sg/~/media/resource/sic/The_Singapore_Code_on_Take_Overs_and_Merger_1%20May%202018.pdf" target="_blank">Code</a> -  collectively hold 77.62% of shares out and have given an irrevocable undertaking in favour of the Offer.
The offer is subject to a 90% acceptance condition. If this is achieved, the Offeror will exercise its right to compulsorily acquire shares that have not been tendered under Section 215(3) of the <a href="https://sso.agc.gov.sg/Act/CoA1967" target="_blank">Companies Act</a>.
KKR intends to fund the Offer by providing a hybrid combination of debt and structured equity financing.
Shares of 800 Super rolled over late August following the release of its 2018 <a href="https://links.sgx.com/FileOpen/800%20Super%20-%20Q4%202018%20Financial%20Announcement.ashx?App=Announcement&amp;FileID=522978" target="_blank">full-year results</a> (June Y/E), with revenue and profit down 3.7% and 46.7% respectively. The performance was affected by the completion of term contracts and the renewal of certain contracts at more competitive pricing.
<a href="https://links.sgx.com/FileOpen/800%20Super%20-%20Q2%202019%20Financial%20Announcement.ashx?App=Announcement&amp;FileID=543189" target="_blank">2019 interim results</a> fared no better with revenue up 16.9% in the 1H19 against the corresponding period last year, but profit was down 47.7% to $3.6mn.
The rationale for the Offer cites greater flexibility for management in a de-listed vehicle and the low liquidity.
Although a challenging business, there is an air of opportunism to the Offer, with shares bouncing off a three-year low in March this year.
800 Super has also capex'ed S$80mn in the past two years - which is why net debt has ballooned to S$107mn as at December 18 - on a biomass plant in Tuas South, a new laundry business (Iwash Laundry) and additional motor vehicles. The waste treatment plant was commissioned in FY18 and the laundry business this year.
The plant was <a href="https://800super.com.sg/about/news/83-800-super-bags-s-193-5-million-public-waste-collection-contract-for-pasir-ris-bedok-sector-in-singapore-2" target="_blank">awarded</a> an S$193.5mn, 7-year public waste collection licence in January 2018 by the National Environmental Agency for the provision of refuse collection services for the Pasir Ris –  Bedok sector.
The family is, therefore, taking the company private just as it moves into downstream waste treatment and affiliated operations thereon - it will take the steam energy recovered from the waste treatment plants for its laundry process.
Still, this is the only Offer for minority shareholders. The price will not be increased. And the family has the option of a delisting offer should the Offer fail, and the family is not refrained from voting its 75%+ stake.
<hr>
The <a href="https://www.smartkarma.com/insights/quiddity-singapore-m-a-guide-2019" target="_blank">Quiddity Singapore M&amp;A Guide 2019</a> is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Singapore M&amp;A landscape. Others in the series to date are <a href="https://www.smartkarma.com/insights/quiddity-hong-kong-m-a-guide-2019" target="_blank">Hong Kong</a>, and <a href="https://www.smartkarma.com/insights/quiddity-japan-m-a-guide-2019" target="_blank">Japan</a>. Watch for more soon.

800 super holdings (ESH SP), a provider of waste management, cleaning, and conservancy services, has received a privatisation Offer from KKR by way of a Voluntary Conditional Offer of $0.90/share or a 16.1% premium to last close and 30.6% to the 1-month VWAP. The Offer price will not be increased.
The Lee Family - the "promoters" and deemed joint Offerors under Rule 10 of the Code -  collectively hold 77.62% of shares out and have given an irrevocable undertaking in favour of the Offer.
The offer is subject to a 90% acceptance condition. If this is achieved, the Offeror will exercise its right to compulsorily acquire shares that have not been tendered under Section 215(3) of the Companies Act.
KKR intends to fund the Offer by providing a hybrid combination of debt and structured equity financing.
Shares of 800 Super rolled over late August following the release of its 2018 full-year results (June Y/E), with revenue and profit down 3.7% and 46.7% respectively. The performance was affected by the completion of term contracts and the renewal of certain contracts at more competitive pricing.
2019 interim results fared no better with revenue up 16.9% in the 1H19 against the corresponding period last year, but profit was down 47.7% to $3.6mn.
The rationale for the Offer cites greater flexibility for management in a de-listed vehicle and the low liquidity.
Although a challenging business, there is an air of opportunism to the Offer, with shares bouncing off a three-year low in March this year.
800 Super has also capex'ed S$80mn in the past two years - which is why net debt has ballooned to S$107mn as at December 18 - on a biomass plant in Tuas South, a new laundry business (Iwash Laundry) and additional motor vehicles. The waste treatment plant was commissioned in FY18 and the laundry business this year.
The plant was awarded an S$193.5mn, 7-year public waste collection licence in January 2018 by the National Environmental Agency for the provision of refuse collection services for the Pasir Ris –  Bedok sector.
The family is, therefore, taking the company private just as it moves into downstream waste treatment and affiliated operations thereon - it will take the steam energy recovered from the waste treatment plants for its laundry process.
Still, this is the only Offer for minority shareholders. The price will not be increased. And the family has the option of a delisting offer should the Offer fail, and the family is not refrained from voting its 75%+ stake.

The Quiddity Singapore M&amp;A Guide 2019 is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Singapore M&amp;A landscape. Others in the series to date are Hong Kong, and Japan. Watch for more soon.

800 super holdings

Is 800 Super Talking Rubbish?