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

Quiddity Advisors

Event-Driven

For the month of February, thirteen new deals were discussed on Smartkarma with an overall deal size of US$12.3bn.
This overall number includes the "offer" for Hanergy Thin Film Power (566 HK) which has no value, as yet, attached to the scrip component.
A firm number for Glow Energy Pcl (GLOW TB) has yet to be announced, which could result in a US$4bn+ deal.
The average premium to last close for the new deals was 27.5%.




New Deals


Industry


Deal size (US$mn)


Premium


Deal Type



Australia


Ruralco Holdings (RHL AU)
Agriculture
336
44.0%
Scheme





HK


Hanergy Thin Film Power (566 HK)
Semiconductor Equipment
-
-
Scheme


Xingfa Aluminium (98 HK)
Aluminum
202
2.9%
Off-Mkt





Japan


Veriserve Corp (3724 JP)
IT Consulting
143
43.6%
Off-Mkt


Jiec Co Ltd (4291 JP)
Software
170
39.3%
Off-Mkt


Nd Software (3794 JP)
Software
270
28.7%
Off-Mkt


U Shin Ltd (6985 JP)
Auto Parts and Equipment
288
28.3%
Off-Mkt





Thailand


Golden Land Prop Dvlp (GOLD TB)
Diversified Real Estate
632
2.4%
Off-Mkt


Glow Energy Pcl (GLOW TB)
IPP and Energy Traders
4,000
-
Tender Offer (?)





UK






Dairy Crest (DCG LN)
Dairy Products
1,272
12.0%
Scheme


Ophir Energy (OPHR LN)
Oil &amp; Gas E&amp;P
511
66.0%
Scheme


RPC Group PLC (RPC LN)
Financials
4,106
16.0%
Scheme





China


Sichuan Swellfun Co Ltd A (600779 CH)
Alcoholic Beverages
330
19.3%
Off-Mkt



Source: Company announcements
Brief Summary of News in February of Arb Situations On Our Radar





Australia


Comments (with links)



Eclipx (ECX AU)
At the Eclipx Group 2019 AGM, the Chairman mentioned that it was the board unanimously endorses this proposal and that a revised timetable will be announced when the contents of the Scheme Book are agreed upon with MMS.


Graincorp Ltd A (GNC AU)
At the GrainCorp 2019 AGM, the Chairman announced that the engagement between the two parties remains active, and the proposal is still indicative and non-binding.


Greencross Ltd (GXL AU)
On 6th February 2019, Greencross held a scheme meeting at which the shareholders approved the scheme of arrangement (99.67% of Greencross shareholders present and voting at the Scheme Meeting voted in favour). A dividend of AUD 0.19 was announced on 7th February (ex-date: 12-Feb-2019), to be paid on 20th February 2019, conditional on court approval of the scheme. The scheme received court approval on 11th February 2019, along with which the company suspended the trading of its shares on ASX from the close of trading on 11th February 2019. The Scheme was implemented on 27th February 2019.


Healthscope Ltd (HSO AU)
On 1st February 2019 it was announced that Healthscope entered into an Implementation Deed with Brookfield, where Brookfield is to acquire all of the shares of Healthscope through a scheme at A$2.5/share and an off-market takeover offer A$4.2/share. A dividend of A$ 0.035 (ex-date:04-Mar-2019) announced on 14th February 2019, is included in the offer price.


MYOB Group Ltd (MYO AU)
The "go-shop" period in relation to the KKR Scheme, which allowed MYOB and its advisers to solicit a superior competing proposal, ended on 22nd February 2019, without any superior proposals emerging. As a result, the Directors of MYOB have reaffirmed their recommendation of the scheme. The Scheme Booklet is expected to be released in mid - late March 2019, with the Scheme meeting expected to be held in late April 2019.


Navitas Ltd (NVT AU)
On 18th February 2019, when the exclusivity period granted to BGH Consortium was to expire, Navitas announced that the exclusivity period is extended to 1st March 2019. This extension was granted in order to carry out a limited set of remaining due diligence, as per the announcement. The Directors of Navitas continue to unanimously recommend the Scheme.


Propertylink Group (PLG AU)
On 20th February 2019, the company announced the offer becoming unconditional, along with which it was announced that ESR has an interest of 74.78% of Propertylink and that Centuria Capital Group in respect of their 19.51% ownership. The offer has been extended to the 8th March.


Ruralco Holdings (RHL AU)
Ruralco has announced it has entered into a Scheme Implementation Deed in which Nutrien Ltd (NTR CN) has agreed to take Ruralco private at $4.40/share - a 44% premium to last close and the one-month VWAP.


Sigma Healthcare (SIG AU)
In a market update released by Sigma Healthcare, on 11th February 2019, it was announced that high level due diligence is still underway with regard to the potential merger proposal.









Hong Kong


Comments (with links)



Hanergy Thin Film Power (566 HK)
Hanergy announced on 26th February 2019, the intention of HMEH to privatise the company by way of a Scheme, at one SPV share for every Hanergy share. No price was given for the SPV.


Harbin Electric Co Ltd H (1133 HK)
The deadline to despatch the Composite Document was further extended to 29th March 2019, from its previous extension - 22nd February 2019.


Hopewell Holdings (54 HK)
The scheme document for the privatisation of Hopewell Holdings was dispatched on 24th February 2019.


New Sports Group (299 HK)

The deadline to despatch the Composite Document has been extended to either 30th April 2019 or 7 days after the date of fulfilment of the conditions, whichever is earlier. This extension is required in order to prepare the Goldjoy Circular to convene the EGM and because completion is subject to the conditions of the Sale and Purchase Agreement being fulfilled.



Xingfa Aluminium (98 HK)

On 13th February 2019, major shareholder of Xingfa Aluminium - Guangxin Aluminium, acquired 5,000 shares in Xingfa, which triggered the launch of a Madatory General Offer, as Guangxin's stake in Xingfa exceeded 30%. The offer price is HK$5.60 cash/share.










India


Comments (with links)



Bharat Financial Inclusion (BHAFIN IN)
The transaction is expected to close today


Glaxosmithkline Consumer Healthcare (SKB IN)

No Feb update




Gruh Finance (GRHF IN)
No Feb update









Indonesia


Comments



Bank Danamon Indonesia (BDMN IJ)
Based on the original schedule, BDMN has today gone ex-rights on being able to vote in the Shareholder Meeting on March 26 and also ex-rights on the ability to select the cash payment for your shares.








Japan


Comments (with links)



Clarion Co Ltd (6796 JP)
The offer closed today


Descente Ltd (8114 JP)

On the 7th Feb, Descente announced that it was opposed to the deal. They can't do much because the deal is launched. Shortly after, the employees union, a group of ex-employees, and a former president all came out against Itochu's Tender Offer. On the 26th, the company announced that it would bring forward its announcement of its Medium Term Plan by a couple of months.



Jiec Co Ltd (4291 JP)

No update since launch on 31 January



Kabu.Com Securities (8703 JP)
On 12th February 2019, KDDI Corp announced that they intend to conduct a Tender offer for a minimum 45,758,400 shares of Kabu.Com Securities at ¥559/share. If they are able to acquire the minimum, it would lead to a Two Step Squeezeout, because when KDDI's holding is combined with that of MUFJ Securities', their total holding reaches 66.67%.


Kosaido Co Ltd (7868 JP)
On 4th February 2019 after the close, Reno KK filed a Large Shareholder Report declaring a 5.83% position as of 28th January 2019, following which, on the 5th of February they announced that they had purchased an additional 2.49% on the 29th of January, increasing their holding to 8.31%. On the days that followed, along with their joint holder Aoyama Fudosan, the Reno group increased their stake to 9.55% by 1st February 2019 (which was announced on 8th February 2019). On 18th February, an article was published on toyokeizai.net which suggested that Mr. Nakatsuji (longstanding external shareholder) and Sakurai Mie (leader shareholder and descendent of the founder of Kosaido), were against the takeover. It was announced on 26th February 2019, that the tender offer close date had extended to 12th March 2019, from 1st March 2019.


Nexon Co Ltd (3659 JP)
Reportedly Amazon.com Inc (AMZN US) and Comcast will enter the race and have submitted initial bids to acquire Nexon. EA was also mooted as a participant in first round bidding. 



Nd Software (3794 JP)
On the 8 Feb, ND Software announced a Management Buy Out (MBO) sponsored by both the existing president, who owns 20%, and J-Will Partners to take the company private at ¥1700/share, which is a 28.7% premium to last trade and comes out to be roughly 7.2x trailing 12-month EV/EBITDA.


Pioneer Corp (6773 JP)
Pioneer has received all anti-trust approvals


Shinmaywa Industries (7224 JP)
The results of the Tender Offer was released on 20th February 2019. There were 32.43 million shares tendered, while the Tender Offer was only to buy 26.6666 million shares, which led to an 82.23% pro-ration. Following the closing of the Tender Offer, the Murakami grouping will own 4% of shares out and 5.7% of voting rights remaining.


U Shin Ltd (6985 JP)
On 14th February 2019, Minebea Mitsumi announced the launch of their Tender Offer to acquire U Shin Ltd at ¥985/share. The offer opened on 15th February 2019, and will close on 10th April 2019. The intention to make an offer to acquire U Shin Ltd was first announced back in November 2018.


Veriserve Corp (3724 JP)
After market close on 31st January 2019, Sumitomo Corp (8053 JP) consolidated subsidiary SCSK Corp (9719 JP) announced a Tender Offer to buy out minorities in Veriserve Corp (3724 JP). At the time of announcement, SCSK held 2,900,000 shares or 55.59% of voting rights. The Tender Offer is at ¥6,700/share








New Zealand


Comments




Trade Me (TME NZ)


No Feb update









Singapore


Comments (with links)



Ascendas-Singbridge
No Feb update


Courts Asia Ltd (COURTS SP)
The formal offer document was despatched on 1st February 2019, with the first closing date scheduled for 1st March 2019. On the same day a couple of hours later, due to irrevocable involved, the 50% shareholder acceptance condition was met, and the offer was declared unconditional. This allowed the company to extend the closing date of the offer to 15th March 2019 (final closing date).


M1 Ltd (M1 SP)
On 15th February 2019, an announcement was published declaring the offer unconditional, this led to the extension of the closing date to 4th March 2019.


Pci Ltd (PCI SP)
Singapore Exchange Securities Trading Limited approved PCI Limited's application to delist the company from the official list of the SGX-ST, when the scheme becomes effective and binding in accordance with its terms









South Korea


Comments



Hyundai Oilbank
No update









Taiwan


Comments



Yungtay Engineering (1507 TT)
On the 14th of February the company announced that in the board meeting held on 29th January 2019, two independent directors objected to the terms of the Tender Offer which had been agreed. There is reportedly an investigation into shareholder rights being conducted. It is to note that in the 14th Feb release, it became clear that Otis Elevator had bid TWD 63/share for Yungtay but the directors had not approved the bid.









Thailand


Comments (with links)



Delta Electronics Thai (DELTA TB)
On 13th February 2019, Delta announced that the conditions precedent of the Conditional Voluntary Tender Offer was fully satisfied, following which on 18th February 2019 the Intention to Make a Tender Offer (Form 247-3) was announced along with the FY18 Dividend of Bt 2.30/share (which will be added). The Offer document was released on 22nd February 2019, announcing the Tender offer period - from 26-Feb-2019 to 01-Apr-2019.


Glow Energy Pcl (GLOW TB)
In the "Management Discussions" attached to FY18 earnings of Global Power Synergy Company Ltd, they mentioned that they are collaborating with GLOW in order to decide on tender offer price for GLOW's shares, after taking into consideration the disposal of one of GLOW's plants.


Golden Land Prop Dvlp (GOLD TB)
On 25th February 2019, Golden Land Prop Dvlp announced that they had received information that Frasers Property intends to make a Voluntary Tender Offer to acquire all of Golden Land Prop Dvlp's shares at Bt 8.5/share.


Thanachart Capital (TCAP TB)
Thanachart Capital Public Company Limited (TCAP), as a major shareholder of Thanachart Bank Company Limited, announced on 26th February 2019, that they entered the Non-binding Memorandums of Understanding, in relation to the merger between Thanachart and TMB.









Europe/UK


Comments (with links)



Amer Sports Oyj (AMEAS FH)
On 21st February 2019, the offer period expiry date was extended to 7th March 2019 (previously 28th February 2019). As per the announcement on 22nd February 2019, the Anta Sports shareholders approved the deal to buy Amer Sports, with 99.19% of votes cast being for the deal. A couple of days later, on 25th February 2019, Mexico's regulator approved the takeover, and this was the last of the approvals.


Ceva Logistics AG (CEVA SW)
No Feb update


Dairy Crest (DCG LN)
On 22nd February 2019, an announcement was released with the news that Saputo Inc had offered £6.20 cash/per share, to acquire all of the shares of Dairy Crest by way of a Scheme of Arrangement.


Diageo Plc (DGE LN)
On 26th February 2019, Diageo made an announcement stating that they had been approached by Sichuan Swellfun, with a possible partial tender offer to increase their stake in Diageo to 70% (from 60%) at RMB 45/share.


Earthport plc (EPO LN)
Visa announced an increase in their offer to £0.37/share (from £0.30/share), on 7th February 2019. The following day Mastercard issued a stated that they were considering their options. On 11th February 2019, Visa posted their Offer Document, following which Mastercard announced that they no longer have any letters of intent acceptiig their offer. An announcement on 21st February 2019, mentioned that both the Court Meeting and General Meeting have been adjourned by the Chairman and the new date will be announced in due course. On 27th February 2019, the offer was extended to remain open till 8th March 2019.


Ophir Energy (OPHR LN)
It was announced on 30th January 2019 that Medco Energi Internasional T had reached an agreement to acquire Ophir Energy at an offer price of £0.55/share, by way of a Scheme of Arrangement.Petrus Advisors (3.5% shareholder) dialed up the pressure on its opposition for this offer, with a letter addressed to Ophir's Chairman, on 19th February 2019.


Oslo Børs VPS Holding ASA
On 4th February Nasdaq AB published the Public Offer document, according to which the acceptance period is from 4th February 2019 to 4th March 2019.


Panalpina Welttransport Holdin (PWTN SW)
On 4th February 2019, Panalpina disclosed that their largest shareholder, the Ernst Göhner Foundation, does not support DSV's indicative offer, which was made in January 2019. Following an announcement by Panalpina on 15th February 2019, regarding Panalpina pursuing a private combination with Agility Group, DSV informed the market that on 6th February 2019, they put forward an all-cash offer of CHF 180/share.


RPC Group PLC (RPC LN)
On the morning of January 23rd, 2019, after five PUSU extensions, RPC announced the recommended final cash offer by Apollo for 782p per share, or £3.323 billion.





 

M&A: A Round-Up of Deals in February 2019

Celgene Corp

M&A: A Round-Up of Deals in February 2019