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

Vitalharvest (VTH AU): Macquarie Ups Its Offer

Vitalharvest (VTH AU): Roc Blinks, And Bumps

Vitalharvest (VTH AU): Macquarie Doesn't See A Lemon

Quiddity Advisors

Event-Driven

Vitalharvest Freehold Trust / Event-Driven

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<p><em><strong>Corrigenda: There is an error in this Insight. Please note the correction.</strong></em></p>
<p><em><strong>Correction: All references below to Macquarie Agricultural Funds Management (MAFM)'s bumped offer on 23 April should read A$1.24/share instead of A$1.23/share.</strong></em></p>
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<p>Back on the 9 November 2020, orchard landlord <a href="https://www.smartkarma.com/entities/vitalharvest-freehold-trust" target="_blank" data-smartkarma-citation="entities:29120:1" rel="noopener">Vitalharvest Freehold Trust (VTH AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02306235-3A554957?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">received</a> an all-cash cash Offer of $1.00/unit from Macquarie Infrastructure and Real Assets, by way of a Scheme. Should the Scheme not be approved by unitholders, MIRA offered to buy all of VTH's assets for A$300mn in cash. The asset sale requires a reduced unitholder approval threshold.</p>
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<p>Macquarie Agricultural Funds Management (MAFM) and VTH subsequently entered into a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02309943_PS-3A555619?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">SID</a>,  for A$1.00/unit, which covered both the Scheme and asset sale. Absent a superior Offer, Primewest (19.9%) said it would support MAFM's Offer.</p>
<p>The entry of  Roc Private Equity on the 26 February has lead to a two-month competitive bidding situation, culminating in this morning's Offer of <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02366483-3A565774?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">A$1.23/share</a> from MAFM.</p>
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<p>Below is a timeline of events that subsequently transpired (with insights in bold &amp; italics) since the initial announcement:</p>
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<table class="table table-striped">
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<td style="width: 73.9881px;">
<h3>Date</h3>
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<td style="width: 629.544px;">
<h3>Data in the Date</h3>
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<td style="width: 73.9881px;">9-Nov-21</td>
<td style="width: 629.544px;">
<p>An all-cash cash Offer of $1.00/unit from Macquarie Infrastructure and Real Assets was <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02306235-3A554957?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a></p>
<p><em><strong><a href="https://skr.ma/wjJLA" target="_blank" rel="noopener">Vitalharvest (VTH AU): Macquarie Doesn't See A Lemon</a></strong></em></p>
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<td style="width: 73.9881px;">17-Nov-21</td>
<td style="width: 629.544px;">Macquarie Agricultural Funds Management (MAFM) and VTH entered into a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02309943_PS-3A555619?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">SID</a>,  for A$1.00/unit. The SID covered both the Scheme and asset sale, wherein the distribution was expected to be equivalent under either outcome. Subject to a superior proposal, Primewest (19.9%) said it would support MAFM's Offer.</td>
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<td style="width: 73.9881px;">1-Feb-21</td>
<td style="width: 629.544px;">An agreement was <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02336388-3A560402?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">reached</a> whereby MAFM would pay an additional A$0.025/unit from rent received in the first half of the year up to 31 December. The combined value of the distribution - be it under the Scheme or the asset sale - would be A$1.025/unit. </td>
</tr>
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<td style="width: 73.9881px;">26-Feb-21</td>
<td style="width: 629.544px;">VTH announced a non-binding <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02347268-3A562484?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">Offer</a> from Roc Private Equity of A$1.08/unit by way of a Scheme, which also incorporates an asset sale component in a similar vein to that of MAFM's. VTH said it had <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02350149-3A563012?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">assessed</a> the proposal and determined that it would be reasonably likely to result in a superior proposal. The unitholder meeting to vote on MAFM's offer, initially to be held on the 4 March, was subsequently postponed.</td>
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<td style="width: 73.9881px;">11-Mar-21</td>
<td style="width: 629.544px;">
<p>MAFM <a href="https://www.asx.com.au/asxpdf/20210311/pdf/44tkfcwkr3hm7c.pdf" target="_blank" rel="noopener">matched</a> Roc's Offer of A$1.08/unit, plus extended the payment of the A$0.025/unit dividend. </p>
<p><em><strong><a href="https://skr.ma/BcLPi" target="_blank" rel="noopener">Vitalharvest (VTH AU): Macquarie Ups Its Offer</a></strong></em></p>
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<td style="width: 73.9881px;">18-Mar-21</td>
<td style="width: 629.544px;">
<p>Roc <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02355011-3A563788?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumps</a> its non-binding proposal to A$1.12/unit, either via a Scheme or from proceeds from an asset sale. A permitted dividend of A$0.025/unit, similar to that under MAFM's Offer, would be bolted on to that.</p>
<p><em><strong><a href="https://skr.ma/dhdGy" target="_blank" rel="noopener">Vitalharvest (VTH AU): Roc Blinks, And Bumps</a></strong></em></p>
</td>
</tr>
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<td style="width: 73.9881px;">1-Apr-21</td>
<td style="width: 629.544px;">
<p>Roc's A$1.12/share now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02359878-3A564660?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">binding</a>. Matching rights for MAFM triggered.</p>
</td>
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<td style="width: 73.9881px;">7-Apr--21</td>
<td style="width: 629.544px;">
<p>MAFM <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02361098-3A564868?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">matches</a> at A$1.12/share. A dividend of A$0.025/unit is also to be permitted and added.</p>
</td>
</tr>
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<td style="width: 73.9881px;">8-Apr-21</td>
<td style="width: 629.544px;">
<p>Roc <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02361506-3A564934?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumps</a> its binding proposal to A$1.16/unit, either via a Scheme or from proceeds from an asset sale. A dividend of A$0.025/unit is also to be permitted and added. Matching rights for MAFM triggered.</p>
</td>
</tr>
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<td style="width: 73.9881px;">14-Apr-21</td>
<td style="width: 629.544px;">
<p>MAFM <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02363378-3A565247?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">matches</a> at A$1.16/share. A dividend of A$0.025/unit is also to be permitted and added.</p>
</td>
</tr>
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<td style="width: 73.9881px;">15-Apr-21</td>
<td style="width: 629.544px;">
<p>Roc <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02363884-3A565352?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumps</a> its binding proposal to A$1.18/unit, either via a Scheme or from proceeds from an asset sale. A dividend of A$0.025/unit is also to be permitted and added. Matching rights for MAFM triggered.</p>
</td>
</tr>
<tr>
<td style="width: 73.9881px;">22-Apr-21</td>
<td style="width: 629.544px;">
<p>MAFM <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02365946-3A565663?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumps</a> to A$1.19/share. A dividend of A$0.025/unit is also to be permitted and added.</p>
</td>
</tr>
<tr>
<td style="width: 73.9881px;">22-Apr-21</td>
<td style="width: 629.544px;">
<p>Roc <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02366483-3A565774?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumps</a> its binding proposal to A$1.23/unit, either via a Scheme or from proceeds from an asset sale. A dividend of A$0.025/unit is also to be permitted and added.</p>
</td>
</tr>
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<td style="width: 73.9881px;">23-Apr-21</td>
<td style="width: 629.544px;">
<p>MAFM <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02366483-3A565774?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumps</a> to A$1.23/share. A dividend of A$0.025/unit is also to be permitted and added.</p>
</td>
</tr>
<tr>
<td colspan="2" style="width: 724.147px;"><em>Source: ASX </em></td>
</tr>
</tbody>
</table>
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<p>The offer is now up 25.5% (including the dividend) since MAFM's first Offer. Or around A$47mn increase in the deal size.</p>
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<p>This competitive bidding situation looks set to run some more.</p>
</div>
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<p>More below the fold.</p>
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Corrigenda: There is an error in this Insight. Please note the correction.
Correction: All references below to Macquarie Agricultural Funds Management (MAFM)'s bumped offer on 23 April should read A$1.24/share instead of A$1.23/share.

Back on the 9 November 2020, orchard landlord Vitalharvest Freehold Trust (VTH AU) received an all-cash cash Offer of $1.00/unit from Macquarie Infrastructure and Real Assets, by way of a Scheme. Should the Scheme not be approved by unitholders, MIRA offered to buy all of VTH's assets for A$300mn in cash. The asset sale requires a reduced unitholder approval threshold.


Macquarie Agricultural Funds Management (MAFM) and VTH subsequently entered into a SID,  for A$1.00/unit, which covered both the Scheme and asset sale. Absent a superior Offer, Primewest (19.9%) said it would support MAFM's Offer.
The entry of  Roc Private Equity on the 26 February has lead to a two-month competitive bidding situation, culminating in this morning's Offer of A$1.23/share from MAFM.


Below is a timeline of events that subsequently transpired (with insights in bold &amp; italics) since the initial announcement:






Date


Data in the Date



9-Nov-21

An all-cash cash Offer of $1.00/unit from Macquarie Infrastructure and Real Assets was announced
Vitalharvest (VTH AU): Macquarie Doesn't See A Lemon



17-Nov-21
Macquarie Agricultural Funds Management (MAFM) and VTH entered into a SID,  for A$1.00/unit. The SID covered both the Scheme and asset sale, wherein the distribution was expected to be equivalent under either outcome. Subject to a superior proposal, Primewest (19.9%) said it would support MAFM's Offer.


1-Feb-21
An agreement was reached whereby MAFM would pay an additional A$0.025/unit from rent received in the first half of the year up to 31 December. The combined value of the distribution - be it under the Scheme or the asset sale - would be A$1.025/unit. 


26-Feb-21
VTH announced a non-binding Offer from Roc Private Equity of A$1.08/unit by way of a Scheme, which also incorporates an asset sale component in a similar vein to that of MAFM's. VTH said it had assessed the proposal and determined that it would be reasonably likely to result in a superior proposal. The unitholder meeting to vote on MAFM's offer, initially to be held on the 4 March, was subsequently postponed.


11-Mar-21

MAFM matched Roc's Offer of A$1.08/unit, plus extended the payment of the A$0.025/unit dividend. 
Vitalharvest (VTH AU): Macquarie Ups Its Offer



18-Mar-21

Roc bumps its non-binding proposal to A$1.12/unit, either via a Scheme or from proceeds from an asset sale. A permitted dividend of A$0.025/unit, similar to that under MAFM's Offer, would be bolted on to that.
Vitalharvest (VTH AU): Roc Blinks, And Bumps



1-Apr-21

Roc's A$1.12/share now binding. Matching rights for MAFM triggered.



7-Apr--21

MAFM matches at A$1.12/share. A dividend of A$0.025/unit is also to be permitted and added.



8-Apr-21

Roc bumps its binding proposal to A$1.16/unit, either via a Scheme or from proceeds from an asset sale. A dividend of A$0.025/unit is also to be permitted and added. Matching rights for MAFM triggered.



14-Apr-21

MAFM matches at A$1.16/share. A dividend of A$0.025/unit is also to be permitted and added.



15-Apr-21

Roc bumps its binding proposal to A$1.18/unit, either via a Scheme or from proceeds from an asset sale. A dividend of A$0.025/unit is also to be permitted and added. Matching rights for MAFM triggered.



22-Apr-21

MAFM bumps to A$1.19/share. A dividend of A$0.025/unit is also to be permitted and added.



22-Apr-21

Roc bumps its binding proposal to A$1.23/unit, either via a Scheme or from proceeds from an asset sale. A dividend of A$0.025/unit is also to be permitted and added.



23-Apr-21

MAFM bumps to A$1.23/share. A dividend of A$0.025/unit is also to be permitted and added.



Source: ASX 




The offer is now up 25.5% (including the dividend) since MAFM's first Offer. Or around A$47mn increase in the deal size.

This competitive bidding situation looks set to run some more.


More below the fold.


Vitalharvest (VTH AU): Bumpity Bumpity Berry Bidding