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

Yorkey Optical (2788 HK): Webb Bumps... Will Asia Optical?

Yorkey Optical (2788 HK): JLL Meets Asia Optical And Webb Halfway... Sort Of...

Quiddity Advisors

Event-Driven

Yorkey Optical International Cayman / Event-Driven

Yorkey Optical International Cayman (2788 HK)

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<p>After being <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1006/2021100600336.pdf" target="_blank" rel="noopener">suspended</a> on the 6 October pursuant to the Hong Kong Code on Takeovers and Mergers, <a href="https://www.smartkarma.com/entities/yorkey-optical-intl-cayman" target="_blank" data-smartkarma-citation="entities:12407:1" rel="noopener">Yorkey Optical Intl Cayman (2788 HK)</a>, an optical and opto-electronic products manufacturer, has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1015/2021101501288.pdf" target="_blank" rel="noopener">announced</a> an Offer, by way of a Scheme, from <a href="https://www.smartkarma.com/entities/asia-optical-co-inc" target="_blank" data-smartkarma-citation="entities:11214:1" rel="noopener">Asia Optical Co (3019 TT)</a>, Yorkey's largest shareholder.</p>
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<p>The consideration is $0.88/share, a 54.4% premium to last close - and shares gained 14% on Friday.  <strong>The Offer Price has not been declared final</strong>. No dividends are expected to be declared during the Offer period. </p>
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<p>Asia Optical holds 27.79% (directly &amp; indirectly) of shares out, and with connected parties, 41.63%.  Disinterested shareholders comprise 58.37% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 5.837% of shares out. </p>
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<p>The headcount test applies.</p>
<p>Activist investor David Webb holding at least <a href="https://di.hkex.com.hk/di/NSNoticeSSList.aspx?sa2=ns&amp;sid=9800&amp;corpn=Yorkey+Optical+International+(Cayman)+Ltd.&amp;sd=16/10/2016&amp;ed=16/10/2021&amp;cid=0&amp;sa1=cl&amp;scsd=16%2f10%2f2016&amp;sced=16%2f10%2f2021&amp;sc=2788&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">5.01%</a>,  has been <a href="https://webb-site.com/dbpub/articles.asp?p=32013" target="_blank" rel="noopener">consistently vocal</a> about Yorkey's large net cash position, and demanding a distribution of the surplus cash.</p>
<p>Yorkey's net cash was US$81.8mn (HK$638mn) as at 30 June 2021, or HK$0.78/share. </p>
<p>Net profit in the 1H21 was US$0.794mn (HK$6.2mn) or HK$12.3mn if extrapolated out for the full year. Therefore Asia Optical is effectively taking out the company at ~6.6x PER FY21E, excluding the net cash position. </p>
<p>This will be a close-run thing. Plus Yorkey is illiquid and Hong Kong takeovers have had a torrid time of late. </p>
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<div>More below the fold.</div>
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<p></p>
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After being suspended on the 6 October pursuant to the Hong Kong Code on Takeovers and Mergers, Yorkey Optical Intl Cayman (2788 HK), an optical and opto-electronic products manufacturer, has now announced an Offer, by way of a Scheme, from Asia Optical Co (3019 TT), Yorkey's largest shareholder.


The consideration is $0.88/share, a 54.4% premium to last close - and shares gained 14% on Friday.  The Offer Price has not been declared final. No dividends are expected to be declared during the Offer period. 


Asia Optical holds 27.79% (directly &amp; indirectly) of shares out, and with connected parties, 41.63%.  Disinterested shareholders comprise 58.37% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 5.837% of shares out. 


The headcount test applies.
Activist investor David Webb holding at least 5.01%,  has been consistently vocal about Yorkey's large net cash position, and demanding a distribution of the surplus cash.
Yorkey's net cash was US$81.8mn (HK$638mn) as at 30 June 2021, or HK$0.78/share. 
Net profit in the 1H21 was US$0.794mn (HK$6.2mn) or HK$12.3mn if extrapolated out for the full year. Therefore Asia Optical is effectively taking out the company at ~6.6x PER FY21E, excluding the net cash position. 
This will be a close-run thing. Plus Yorkey is illiquid and Hong Kong takeovers have had a torrid time of late. 

More below the fold.




Yorkey Optical (2788 HK)'s Scheme: What Will Webb Do?