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Keppel Corp

Last Week in Event SPACE: Keppel, China Merchants, Bumrungrad, Clear Media, Luckin, Lotte Group

299 Views03 May 2020 08:00
SUMMARY

Last Week in Event SPACE ...

(This insight covers specific insights & comments involving Stubs, Pairs, Arbitrage, share Classifications, and Events - or SPACE - in the past week)

M&A - ASIA

Keppel Corp Ltd (KEP SP) (Mkt Cap: $7.7bn; Liquidity: $21mn)

Five weeks since Travis Lundy's last insight, which was bullish vs proxies and spreads in the last third of March as the world was melting down, today we have a different environment. The S&P500 is up 20+% since then. Singapore REITs have rebounded significantly. Recently Keppel DC REIT (KDCREIT SP) closed just 1 tick off its all-time high (and Keppel Corp took the opportunity to sell a block of shares out of its now-private Keppel Telecom & Transport (KPTT SP) entity). Keppel Corp shares themselves are up 17% since then, with the back end at 100% participation up 31% and the spread of the back end against an average of four major proxy baskets having outperformed by 17+% (event-specific delta-neutral).

  • The question for the tender near-term is whether on an OUTRIGHT basis the stock is cheap. In fact, it probably still is somewhat cheap given where things have rebounded, but some of that is because the property proxies have retail in them (so have been weak) and O&M has been a disaster as oil is down hard, hurting O&M customers, and COVID-19 has spread through the foreign worker community in Singapore, clouding the outlook for Singapore-built O&M projects going forward. This makes a restructuring of SMM and Keppel more attractive but it doesn't make prospects look good in the next quarter or two. This is now MUCH more of a momentum play than it was before.
  • At 90% Tender Participation, the S$5.97 close (as at the insight) translated to a price of S$5.09 on the back end. That is still relatively low - low teens or 10x PER on a normalized basis, 15x PER on a current earnings basis -20% from last year. PLUS Keppel has a landbank of 45,000 homes, a decent pile of investments in infrastructure and telecom assets, and the one really weak spot is O&M, which is in much better shape than it was in 2015. A S$5.09 back end at 90% participation is also cheap vs Infra-Heavy at S$5.61 but it is not dramatically cheap vs other proxy baskets.
  • As a tilt, near-term Travis would tilt Bearish on a relative basis, Bullish on an outright basis, but the angle on this is very much a trading angle here rather than an investment angle to own the back end in size. Owning the back end at 90% Participation at S$3.20 in mid-March was a great idea. Owning it here up 60% from mid-March levels is much less enticing. There is substantially less margin of safety on this trade.

(link to Travis' insight: Keppel Corp Partial Tender Update - Odds Less In Your Favor Now Than Before)

China Merchants Port (144 HK) (Mkt Cap: $4.5bn; Liquidity: $12mn)

According to a Bloomberg article, "China Merchants Group Ltd. is exploring taking China Merchants Port Holdings Co. private". CMP popped 23% on the headline. CMP is China's largest public port operator, with throughput volume of its PRC terminals of 83.67mn TEUs (up 3.6% yoy) in FY19, accounting for ~32% (unchanged from FY19) of China's total container throughput. CMP is 63.09% (according to the HKEx) held by SOE China Merchant Group via a 40.91% stake held by China Merchants Port Group Co (201872 CH), and 22.18% from China Merchants Group (mainly China Merchant Union's 21.86% position).

  • CMP is Hong Kong-incorporated. Assuming an Offer is tabled, by way of a Scheme, there will be no headcount test. A blocking vote at the Scheme Meeting would be 3.691% of shares out, assuming CMG has not increased its stake recently. (Technically, the group could have increased its stake to 63.99%, before being required to make a disclosure with the HKEx). After CMG, Blackrock, Vanguard and Eastpring hold 1.61%, 1.37% and 1.35% respectively, according to CapIQ.
  • Dalian Port (Pda) Co Ltd H (2880 HK)'s Dalian's unconditional MGO (Dalian Ports' Unconditional MGO) was pitched at a PER and P/B ratio of 21.9x and 0.6x, which the IFA concluded was fair and reasonable - page 41 on the Doc. CMP is currently at 0.48x P/B.
  • An Offer of ~HK$14, around 50% up from its undisturbed price, and around its recent high in January this year, is a reasonable expectation. This backs out a 50% discount to NAV, compared to a one-year average of 60%.

(link to my insight: China Merchants (144 HK): What A Privatisation May Look Like)

Bumrungrad Hospital Pub Co (BH TB) (Mkt Cap: $2.9bn; Liquidity: $10mn)

Bangkok Dusit Medical Services (BDMS TB) got the ball rolling with a Bt125/sh bid, but BDMS also mentioned that they could potentially raise it by 20% to Bt150/sh. By management's own admission, this is much lower than the 12-month high of Bt181/sh but higher than BDMS' share price at the time of announcement. The target's CEO promptly issued a statement that sounded very much like a rejection. If BDMS wants this deal to go through, they will need to raise the bid. Athaporn Arayasantiparb notes that unlike the earlier acquisition of Tesco (Thailand) by CP Group, there is no rival bidding for control of BDMS against BDMS. Technically, there is no pressure to increase the bidding price unreasonably, but overbidding is still likely due to the human element.

  • Bumrungrad currently enjoys a much higher percentage of foreign patients than Bangkok Dusit (66% vs 30%) and that these patients generate significantly more income than local ones. In addition, Bumrungrad will build a new Petchburi location. This accounts for the bulk of the value not covered in the initial bidding price.
  • Bumrungrad already has small operations in Mongolia and nearby Myanmar, though they are barely generating revenues. With more investments, this could be another source of growth for Bangkok Dusit, which is currently focused only on Thailand.
  • Bumrungrad is a leader in Thai medical technology, as seen from past collaboration with Microsoft, its dialysis business, and the new COVID-19 blood technology. Athaporn believe these factors can justify a bidding price of Bt156.5/sh, which is 25% higher than their first bidding price.

Clear Media Ltd (100 HK) (Mkt Cap: $0.5bn; Liquidity: $1mn)

On the 31 March, Clear-management-led Ever Harmonic made a voluntary cash offer for Clear at HK$7.12/share, a 50.21% premium to the last close of HK$4.74, that Clear's controlling shareholder, Clear Channel Outdoor Cl A (CCO US), with 50.91% of the company, was conducting a strategic review of its stake. The Offer is conditional on 50.1% acceptances. CCO has given an irrevocable to tender in their 50.91% holding. The Offer Price is Final. Dividends declared will be netted although none have been declared.

  • The Composite Document was out on the 27 April, and turned unconditional the next day after CCO tendered.
  • The First Close is the 18 May. Payment is 7 business days from tendering. Done deal.

(link to my insight: Clear Media: Comp Doc Out. Done Deal. Payment 19 May)

Nippon Rietec (1938 JP) (Mkt Cap: $0.5bn; Liquidity: $2mn)

On 19 February, Travis analysed (Nippon Rietec (1938) - SUPER Interesting Events Unfolding) the just-announced news of small-cap Nippon Rietec's ascension to the TSE's First Section. From the ¥1660 open the day following my first insight until TOPIX inclusion today, the total return was 39.9% against total return of TOPIX at -13.0% for the same period. That leaves us at crossroads for the stock.

  • From the time of the trade idea to its TOPIX Inclusion event, the stock was up 39.9% while TOPIX was down 13% and the average comp was down 10%. Nippon Rietec (1938) has a similar OP Margin to the industry over the last three years, averaging 7%, but it is now quite a bit more expensive than its peers - any of them - on almost any EV or Adjusted EV metric vs EBITDA or Revenue, TTM or 3yr Average.
  • It is, despite the recent increase in "liquidity" from the 1,035,000 share offer and greenshoe by financial crossholders selling down their stakes, illiquid. In fact, because the TOPIX Inclusion was on the order of 2.0mm shares and the selldown of shares from non-float to float was 1.035mm shares, Real World Float actually decreased in this exercise.
  • Of the remaining Real World Float, Individuals make up 70% of that total float, and Fidelity makes up two-thirds of the institutional holding. A lot will depend on what Fidelity does. It is not easy to see that there will be a cascade of institutional sellers because it has suddenly become expensive - there just aren't that many. It was a good buy for the event. Now the stock is a sell.
  • If you are long the stock, it is a sell, and if you like the space, there are larger stocks which are cheaper which have direct exposure to East Japan Railway Co (9020 JP) maintenance cycle such as Totetsu Kogyo (1835 JP) - higher float, larger cap, cheaper in every way. There are also electrical work/maintenance companies such as Tokyo Energy & Systems (1945 JP), Kinden Corp (1944 JP), Kyudenko Corp (1959 JP) which are quite a bit less expensive for what they do. If you have no position and are interested in a long-term short position which should drift/underperform, this is a good one.

Hopefluent Group (733 HK) (Mkt Cap: $0.1bn; Liquidity: <$1mn)

Subsequent to property agency service provider Hopefluent entering into a trading halt on the 15 April, an Unconditional Mandatory Cash Offer was announced at $1.50/share - a 7.14% premium to last close of $1.40. The Offer was triggered by the Fu family and various concert parties, currently holding 38.62% of shares out, acquiring 80.0mn shares (11.87%) from various vendors (many of which are employees of Hopefluent), taking the Concert Group's holding to 50.49%. In addition, the Concert Group is joined by Country Garden Services Hold (6098 HK) (CGSH) in this MGO, wherein CGSH will purchase up to a maximum of 67.38mn shares, or 9.99% of shares out. Any additional shares tendered, will be taken up by the Concert Group.

  • The Offer is not fair - not even close. Hopefluent had HK$1.45bn of net cash ($2.15/share) on its books as at 31 Dec 2019 (inclusive of lease liabilities), up from HK$1.045bn in FY18. On a net net basis, Hopefluent had HK$3.3bn (HK$4.90/share) as at FY19.
  • The Joint Offerors intend to maintain Hopefluent's listing. To note, in Hong Kong, shareholders with 10% or more of shares out are excluded from the public float. This explains why CGSH is only seeking 9.99% of shares out. If it bought 10% (for example), plus Fang's (16.30%) and the Concert Group (50.49%) holdings, collectively they would hold 77.09%, breaching the public float of 25%.
  • This is a done deal. I think the docs will be fast-tracked. But it's currently trading through terms - no doubt the introduction of CGSH has spurred interest. Suggest you buy lower and closer to the Offer price - that's a hard floor for around six weeks, probably more.

(link to my insight: Hopefluent (733 HK): Unconditional MGO)

Dsb Co Ltd (8692 JP) (Mkt Cap: $0.1bn; Liquidity: <$1mn)

On 28th April 2020, DBS' parent company Nomura Research Institute Ltd (4307 JP) announced a Tender Offer to buy out minorities. Nomura currently owns 51.8% and aims to buy out the remaining shareholders. If the minimum acceptance condition is met, the Acquirer will reach 66.67+% and will be able to squeeze out minority shareholders who did not accept the original Offer. The Offer Price is ¥920/share and this comes at a large premium of 63% to the undisturbed price.

  • This is a done deal. A quick glance at the list of top shareholders shows that there will be enough friendly shareholders who will accept this Offer to satisfy the minimum acceptance condition.
  • Janaghan Jeyakumar also feels the Offer Price is fair and the majority of remaining shareholders are likely to accept the Offer on account of the Offer Premia; the Offer Price is close to the mid-points of the DCF ranges suggested by FAs; and the PBV implied by the Offer is 33% higher than the 5-year average PBV of the Target.
  • Expect the shares of DSB to go limit-up over the next few trading days until the price reaches close to the Offer price and then expect it to trade very tight to terms until completion. There is effectively zero risk to this trade. It is a simple rate-of-return trade.

(link to Janaghan's insight: DSB Co (8692 JP): This Is a Done-Deal)

In Thai M&A (Part 1): Five Biggest Deals in Thai History, Athaporn looked at the five biggest deal in Thai corporate history, delving into Thai Beverage (THBEV SP) & Fraser And Neave (FNN SP); CP Group & Tesco (Asia); CP ALL PCL (CPALL TB) & Siam Makro Public (MAKRO TB); Mitsubishi UFJ & Bank Of Ayudhya (BAY TB); and Global Power Synergy Company Ltd (GPSC TB) & Glow Energy Pcl (GLOW TB).

Reportedly Nexon Korea increased its debt by an additional ₩1.1tn ($930mn) from its affiliate Neople (developer of the popular PC online game Dungeon Fighter). Nexon Korea already raised ₩382bn in debt from Neople on 8 April 2020. With the announcement of these large debt raisings, Douglas Kim believes (in Nexon Korea Increases Debt by 1.5 Trillion Won - A Big M&A Coming Soon?) that Nexon Korea is ready to make a major M&A deal in the next few weeks.

STUBS

I estimated Toei is trading at a ~21% discount to NAV (around its one-year low) compared to a one-year average of ~10%. The implied stub is at a two-year low. The holding in Toei Animation accounts for 52% of Toei's market cap. Stripping out its 16% holding in television network Tv Asahi Holdings (9409 JP), assets at the parent level largely comprise property, listed securities, and net cash.

  • Toei is cheap, having bounced off a three and a half year low P/B last month. The implied P/B of 0.81x for what is largely a property company and cash/equities, is not unattractive. Toei could benefit its shareholders by selling its cross-holdings, such as TV Asahi, and also selling its property/land, which no doubt is not booked to market in its accounts, and leasing back what is needed. There is also a non-negligible library of movies and content which could be monetized as well.
  • However... broadcasters and studios in Japan are notoriously difficult activist targets, and this company has 52% of voting rights held by corporates as of the last yuho. It is quite clear that the shareholder structure is designed to block any possibility of a change in control.

(link to my insight: StubWorld: Toei Corp, Mandarin Oriental)

Melco International Development (200 HK) announced Melco Resorts & Entertainment (MLCO US) has sold its 9.99% stake in Crown Resorts (CWN AU) to Blackstone. Consideration received for the 67.675mn shares was A$551.55mn or A$8.15/share, a 2.37% discount to the average closing price of A$8.348 over the preceding five days. MLCO paid A$13/share back in June last year. The question is - what now? Blackstone doesn't normally take minority stakes. Separately, I see Melco's discount to NAV at 30% compared to its 12-month average of 31%, having widened from a 14% discount earlier this month.

On the 24 April, local Hong Kong newspaper The Standard, ran an article titled Excelsior turned-office plan hasn't been approved. The article was not particularly well written. Here is the TPB announcement, in which the Planning Department does not support this application. The disapproval appears related to an additional (or bolt-on) application. However, the original site conversion application has been approved. I reached out to the Jardine's Group, who replied with "the TPB decision was in relation to a minor amendment to the existing, approved general building plan. The decision does not impact the original approval (provided in 2018), or the development potential of the site. Mandarin does have the option to appeal the decision, but that needs to be considered in light of the development programme" Therefore, business as usual for Mandarin Oriental Intl (MAND SP).

Jesus Rodriguez Aguilar estimates Investor AB (INVEA SS) is trading at a discount NAV of 20.9% compared to a five year average of 15.7%, and in Investor AB (INVEB SS): Blue Chip Portfolio at a Discount, he recommends long the parent, and short the main listed assets. The issue here is that first eight listed companies comprise 63% of assets; and the discount doesn't look significantly out of whack.

EVENTS

Luckin Coffee (LK US) (Mkt Cap: $1.1bn; Liquidity: $540mn)

Travis delved into the nebulous world that is Luckin Coffee, with Chinese media reports (unconfirmed) suggesting that authorities had "taken over control" (接管) of the company with all senior executives now interviewed and under scrutiny. There is unquestionably serious "official" Chinese involvement. The CSRC commenced an investigation in late-April, in part at the urging of the US Securities and Exchange Commission, with which it has been in contact (and has been admitting as much).
  • Cao Yu, Vice Chairman of China Banking Regulatory Commission, commented on Luckin’s scandal at a press conference of China’s State Council Information Office on 22 April, saying “Luckin’s financial fraud is a nasty incident and bears a profound lesson,” adding that “the CBRC and China Insurance Regulatory Commission firmly supports and works with competent authorities to punish the crime in accordance with the law.” Earlier this week, official Chinese state media outlet CGTN wrote that "China supports overseas market regulators to probe Luckin Coffee fraud" and brought up the fact that the CSRC was communicating with the US SEC regarding Luckin.
  • Lawsuit? The problem with the law, as far as non-Chinese investors are concerned, is that US investors cannot bring suit under this new Securities Law. Furthermore, the new Securities Law also added a clause which bans foreign securities regulators from investigating or gathering evidence in China. This makes the previous obstacle formal. The law, however, says that foreign regulators can team up with their Chinese counterparts to investigate publicly traded companies. While people will complain, this is by far the most common way of cross-border investigation to take place.
  • Suspension? It is not clear how long the NASDAQ suspension is likely to last; and it is not clear that Luckin can "investigate" and be sure that they have found everything until the CSRC itself decides that it has completed its own investigation into the matter. The CSRC will not want the first cross-border investigation under the new Securities Law to find that the CSRC did not discover something that other auditors did, in fact, discover. For that, Travis expects this suspension will take longer than previously expected.

(link to Travis' insight: Luckin Coffee (瑞幸咖啡) Getting More Serious)

Lotte Corporation (004990 KS) (Mkt Cap: $2.3bn; Liquidity: $19mn)

Three months have elapsed since the founder of the Lotte Group Shin Kyuk-Ho passed away in January 2020. Even after his death, his two sons Shin Dong-Bin (second son and the current Chairman of the Lotte Group) and Shin Dong-Ju (first son and chairman of the SDJ Corp) are still fighting over the control of the Lotte Group. Lotte Corp shares went limit up (30%) on Tuesday to reach ₩37,300 on strong volume. On the same day, Shin Dong-Ju announced that he had submitted a proposal for the shareholders including the dismissal of Shing Dong-Bin as the Chairman of the Lotte Holdings Japan ahead of the AGM of Lotte Holdings Japan in June.

  • At this point, it appears that despite Shin Dong-Ju's attempt to oust his brother, once again, Chairman Shin-Dong-Bin is likely to maintain his position as the Chairman of the Lotte Group.
  • The main fight is for the controlling shareholding of Lotte Holdings Japan, because the latter stock is yet to be listed, and investors will likely focus on Lotte Corp. The younger brother (SDB) still controls about 20% in Lotte Holdings Korea. However, Lotte Japan and Hotel Lotte combined control 14%. Hotel Lotte is under Lotte Japan's control. So, whoever owns Lotte Japan will get this 14%.
  • What is the deciding factor for the controlling stake in Lotte Japan? It is the Employee Shareholders' Association (ESA) that controls virtually half of the total shares. SDJ owns Kojunsha, which owns 28.1% in Lotte Japan. But he still needs the ESA. So far, the younger brother has successfully got ESA on his side.

links to:
Douglas' insight: Fight for the Lotte Group Between the Shin Brothers Again?
Sanghyun Park 's insight: Lotte Holdings: Another Hanjin Kal Story?

Retail Partners (8167 JP) (Mkt Cap: $0.5bn; Liquidity: <$1mn)

Japanese supermarket chain operator Retail Partners announced (J-only) it had received approval to move from the Second Section of the TSE to the First Section of the TSE as of 24th April 2020. TSE1 reassignment triggers inclusion into the TOPIX Index. Based on the TOPIX Index Methodology (p7 of the TOPIX Index Guidebook), inclusion will be on the last business day on the month following entrance into the First Section. This means the inclusion event will be at the close of trading 28th May 2020.

  • This is a low growth business but a very stable one. Over the last 12 quarters, the company's revenue has stayed within a narrow range of ¥56.0bn to ¥59.2bn. Capital IQ consensus forecasts revenue to grow at a CAGR of 1% over the next 3 years with OP margin to remain largely unchanged (approximately 2%). The shares have almost doubled in value in little over a month - since reaching a bottom of ¥530 on 13th March 2020 following the recent market sell-off triggered by COVID-19 fears and Oil Price shocks.
  • While its peers have also rebounded in that same period, the news of Retail partners being promoted to the first section of TSE1 has resulted in further out-performance. The YTD price increase of Retail Partners exceeds its peer-average by more than 20%. Despite this, the company's current trading multiples remain lower than the average for its peers. The company's EV/Revenue and EV/EBITDA multiples area around 51% and 28% lower than the respective peer-averages.
  • Janaghan estimates the inclusion to be worth about ¥3.4bn-¥4.0bn in market cap at the current trading price. The impact of this inclusion is equivalent to 38-44 days of trading volume based on 3-month average daily volume. He would buy the stock at the current level. The stock has mostly stayed above the support level of ¥1000 since 2014 and it is currently only 13.5% above this. It is also around 40% below the peak of ¥1903 reached in May 2018. He believes there is more upside.

(link to Janaghan's insight: TOPIX Inclusion: Retail Partners (8167 JP))

SHARE CLASS

Since Brian Freitas' last Insight, Bangkok Bank Public (BBL TB) has outperformed Kasikornbank PCL (KBANK TB) by 8.25% and the price ratio is now trading closer to the upper end of the trading band. We should hear from the Thai NVDR company in May on the Bank of Thailand's decision on the NVDR limit for BBL. Brian expects this will be lowered to 25% from the current limit of 35%. There is an outside chance of the BBL NVDR line being included in the MSCI Thailand index. Given the gains already made since his last insight and with the price ratio trading at the upper end of the trading band, Brian recommends (in BBL / KBANK : Switch Time) selling BBL and buying KBANK. He would do this gradually as BBL may continue outperforming KBANK for some time and the price ratio may overshoot on the upside.

In Unilever's DLC Structure, Jesus tackled Unilever NV (UNIA NA) or Unilever PLC (ULVR LN) dual-class structure. Unilever NV shares were trading at a discount of 3.5% to Unilever Plc, below the 10-year average discount of 0.19%. He recommended a Long NV/Short Plc.

INDEX REBALS

With MSCI deferring the implementation of the changes to the Foreign Ownership Limits in India to the August 2020 QIR at the earliest, the rebalance will not have as big an impact as it would if the changes were implemented. In MSCI May 20 Rebalance Preview - India, Brian expects Torrent Pharmaceuticals (TRP IN), Biocon Ltd (BIOS IN), Indraprastha Gas (IGL IN), Jubilant Foodworks (JUBI IN) and Tata Global Beverages (TGBL IN) to be included in the Standard index, and see Bharat Forge (BHFC IN), Ashok Leyland (AL IN), Mahindra & Mahindra Fin Services Ltd. (MMFS IN) and Tata Power (TPWR IN) as potential deletion candidates.

In MSCI May20 Rebalance Preview - Japan, Brian looked at the names that could be included and excluded from the MSCI Japan Standard indices. He expects 15 deletions from and 10 additions to the MSCI Japan index with a one-way turnover of 1.16%.

The KRX will announce the results of the June 2020 review of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) in the next 2-3 weeks. The constituent changes will be effective from 12 June 2020 and the rebalancing trades will need to be done at the closing auction on 11 June 2020. In KOSPI200 Rebalance Preview: The Final Cut, Brian expects 12 additions and deletions in this review with a one-way turnover of 0.96%. In KOSDAQ150 Rebalance Preview: The Final Cut, Brian expects between 10 to 13 stocks being added to and deleted from the index, with respect to KOSDAQ150. The KRX also announced that they were repealing the 30% capping rule in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX), so there will not be any capping of Samsung Electronics (005930 KS) in this review or any further reviews.

MONTHLY M&A ROUND-UP

For the month of April, just six new deals were discussed on Smartkarma with an overall announced deal size of ~US$9.4bn. The average premium for the new deals announced in April was ~38% and the YTD average premium for all deals discussed on Smartkarma is 34%. The average for all deals discussed on Smartkarma in 2019 (145 all-in) was 31.5%. ((Mostly) Asia M&A: April 2020 Roundup)

OTHER M&A & EVENT UPDATES

  • Bank Permata (BNLI IJ) provided answers to questions from the IDX. Within the answers, they confirm they will do an MTO and they confirm that they expect the transaction for Bangkok Bank Public (BBL TB) to purchase the shares in Permata held by Standard Chartered (STAN LN) and Astra International (ASII IJ) to be consummated in May 2020.

    • It appears that a certain news service which Reports on Deals has received confirmation from BBL that indeed, BoT approval has been received. BBL has not made a public release to the Stock Exchange of Thailand.

  • The State Administration for Market Regulation (announced that on the 20th of April it had approved the JV between China FAW and Dongfeng Automobile Co., (600006 CH).
  • Smallcap Good Com Asset (3475 JP) just announced a buyback of 4.57% of shares outstanding to be executed between 1 May 2020 and 30 April 2021.
  • Stanmore Coal (SMR AU)'s board recommended shareholders accept GEAR's Offer.
  • Hakuhodo Inc acquires a majority stake in Growww Media (8497 TT).
  • Cincinnati Bell (CBB US) announced that proxy advisory firms Institutional Shareholder Services Inc, Glass Lewis & Co., LLC and Egan-Jones Ratings Company have all recommended that shareholders vote FOR the proposed merger with Macquarie Infrastructure Partners. The vote is the 7 May.

  • 58.Com Inc Adr (WUBA US) announced that it has received a preliminary & non-binding Offer from Warburg Pincus Asia LLC, General Atlantic Singapore Fund, Ocean Link Partners, and Jinbo Yao, its chairman and chief executive officer. The group proposed to acquire all of its shares for $27.50 in cash per ordinary share, or $55 per ADS. Same price as that under Ocean Link's earlier proposal. No surprise Ocean Link has teamed up with additional players.

CCASS

My ongoing series flags large moves (~10%) in CCASS holdings over the past week or so, moves which are often outside normal market transactions. These may be indicative of share pledges. Or potential takeovers. Or simply help understand volume swings.

Often these moves can easily be explained - the placement of new shares, rights issue, movements subsequent to a takeover, lock-up expiry, amongst others. For those mentioned below, I could not find an obvious reason for the CCASS move.

Name

%chg

Into

Out of

Xiaomi Corp (1810 HK) 13.31%HSBCOutside CCASS
Singamas Container Hldgs (716 HK) 41.12%UOBDBS
Zhongyuan Bank (1216 HK) 19.13%Sheng YuanBocom
Source: HKEx

The following large movement(s) concern recently listed companies, and therefore are (likely) lock-up related.

Name

% chg

Into

Out of

Tu Yi (1701 HK)11.26%FutuOutside CCASS
Source: HKEx
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