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

Tencent's Offer For Bitauto Is A Done Deal

Yixin Supported By Indicative Chain Principle Price

Bitauto (BITA US): Done Deal. Keep An Eye on Yixin's MGO

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> and Hammer Capital have tabled a preliminary non-binding <a href="http://ir.bitauto.com/news-releases/news-release-details/bitauto-announces-receipt-preliminary-non-binding-going-private" target="_blank" rel="noopener">proposal</a> for <a href="https://www.smartkarma.com/entities/bitauto-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:12004:1" rel="noopener">Bitauto Holdings Ltd Adr (BITA US)</a> at US$16/ADS, a ~20.6% premium to last close and a 36.1% premium to the 30-day VWAP.
Tencent's proposal has the backing from shareholders holding 48.5%, including <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>'s 25.1% stake via JD Financial. Tencent currently holds 7.81%.
Separately, BITA owns ~43.74% of shares out in <a href="https://www.smartkarma.com/entities/yixin-group-ltd" target="_blank" data-smartkarma-citation="entities:26008:1" rel="noopener">Yixin Group Ltd (2858 HK)</a>. Tencent holds 20.59%, JD.com 10.74%, and Hammer 1.48%. Should the Bitauto proposal complete, there will be a change in statutory control in Yixin, obligating Tencent to make an <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0913/ltn20190913395.pdf" target="_blank" rel="noopener">unconditional mandatory general</a> offer.
JD.com has given an irrevocable to not accept the MGO of Yixin Group provided the Offer Price is &lt;$2. However, their statement stops short of agreeing to tender if &gt;$2.  All in, including BITA and JD's stake, this would appear to give Tencent &amp; Hammer &gt;77% in Yixin, breaching its permitted public float of 22.99%, which was granted at the time of its listing. 
Under Hong Kong's chain principle rules, Tencent would not be required to make an MGO price anywhere near $2/share.
<hr>
Quiddity's <a href="https://skr.ma/7bVPk" target="_blank" rel="noopener">Quiddity Hong Kong M&amp;A Guide 2019</a> contains guidelines to the relevant rules, regulations, documentation, and pointers to the Hong Kong M&amp;A landscape. There are several others in the <a href="https://www.smartkarma.com/search?q=Quiddity%20M%26A" target="_blank" rel="noopener">series</a>, and watch for more to come.

Tencent Holdings (700 HK) and Hammer Capital have tabled a preliminary non-binding proposal for Bitauto Holdings Ltd Adr (BITA US) at US$16/ADS, a ~20.6% premium to last close and a 36.1% premium to the 30-day VWAP.
Tencent's proposal has the backing from shareholders holding 48.5%, including JD.com Inc (ADR) (JD US)'s 25.1% stake via JD Financial. Tencent currently holds 7.81%.
Separately, BITA owns ~43.74% of shares out in Yixin Group Ltd (2858 HK). Tencent holds 20.59%, JD.com 10.74%, and Hammer 1.48%. Should the Bitauto proposal complete, there will be a change in statutory control in Yixin, obligating Tencent to make an unconditional mandatory general offer.
JD.com has given an irrevocable to not accept the MGO of Yixin Group provided the Offer Price is &lt;$2. However, their statement stops short of agreeing to tender if &gt;$2.  All in, including BITA and JD's stake, this would appear to give Tencent &amp; Hammer &gt;77% in Yixin, breaching its permitted public float of 22.99%, which was granted at the time of its listing. 
Under Hong Kong's chain principle rules, Tencent would not be required to make an MGO price anywhere near $2/share.

Quiddity's Quiddity Hong Kong M&amp;A Guide 2019 contains guidelines to the relevant rules, regulations, documentation, and pointers to the Hong Kong M&amp;A landscape. There are several others in the series, and watch for more to come.

Tencent's Potential Downstream Offer For Yixin