IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Eoflow Co.,Ltd. develops and sells medical devices. The Company produces and sells wearable disposable insulin pumps and other products. Eoflow markets its products throughout Korea.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a> filed a 117-page appeal against the amended preliminary injunction (PI), sparking a 16% share price rally. <a href="https://www.smartkarma.com/entities/insulet-corp" target="_blank" data-smartkarma-citation="entities:5252:1" rel="noopener">Insulet Corp (PODD US)</a> is required to respond by 14 December.</li>
<li>Eoflow argues that the Massachusetts District Court committed legal errors. However, Eoflow’s arguments are rehashed from those that the district court has already dismissed with balanced counterarguments. </li>
<li>The appeal is Eoflow’s last roll of the dice. Eoflow’s appeal brief worryingly notes that the PI profoundly imperils both the Medtronic transaction and its status as a going concern.</li>
</ul>



Eoflow (294090 KS) filed a 117-page appeal against the amended preliminary injunction (PI), sparking a 16% share price rally. Insulet Corp (PODD US) is required to respond by 14 December.
Eoflow argues that the Massachusetts District Court committed legal errors. However, Eoflow’s arguments are rehashed from those that the district court has already dismissed with balanced counterarguments. 
The appeal is Eoflow’s last roll of the dice. Eoflow’s appeal brief worryingly notes that the PI profoundly imperils both the Medtronic transaction and its status as a going concern.


EOFLOW/Medtronic Tender: Appeals Brief Is All Bark, No Bite

Chindata Group Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides carrier-neutral hyperscale data center solutions to analyze, manage, and store data, business systems, and processes. Chindata Group Holdings serves customers worldwide.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a>’s US$8.60 per ADS offer from Bain Capital is conditional on dissenting shareholders representing less than 12% of outstanding shares. </li>
<li>Oasis Management, an activist fund, <a href="https://investor.chindatagroup.com/static-files/87aad398-55ac-469c-959f-849e42247988" target="_blank" rel="noopener">recently disclosed</a> a shareholding representing 65.9 million ordinary shares, 8.99% of outstanding shares and 1.24% of voting interest. </li>
<li>Precedent transactions where the dissent condition was exceeded suggest two possibilities – the offeror waives the condition or persuades sufficient shareholders to withdraw as dissenters.</li>
</ul>



Chindata Group (CD US)’s US$8.60 per ADS offer from Bain Capital is conditional on dissenting shareholders representing less than 12% of outstanding shares. 
Oasis Management, an activist fund, recently disclosed a shareholding representing 65.9 million ordinary shares, 8.99% of outstanding shares and 1.24% of voting interest. 
Precedent transactions where the dissent condition was exceeded suggest two possibilities – the offeror waives the condition or persuades sufficient shareholders to withdraw as dissenters.


Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake

Weiqiao Textile Company Limited, through its subsidiaries, produces, sells, and distributes cotton yarn, grey fabric and denim.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/weiqiao-textile-co" target="_blank" data-smartkarma-citation="entities:3690:1" rel="noopener">Weiqiao Textile Co (2698 HK)</a> announced a pre-conditional privatisation offer from Weiqiao Chuangye at HK$3.50 per H Share, a 104.7% premium to the undisturbed price.</li>
<li>The pre-condition of regulatory approvals from the NDRC, MOC and SAFE. The key condition is approval by at least 75% independent H Shareholders (&lt;10% of all independent H Shareholders rejection). </li>
<li>The offer price is final. Despite the premium, the offer is struck materially below net cash. Nevertheless, the irrevocable from the largest H Shareholder should help the offer get up.</li>
</ul>



Weiqiao Textile Co (2698 HK) announced a pre-conditional privatisation offer from Weiqiao Chuangye at HK$3.50 per H Share, a 104.7% premium to the undisturbed price.
The pre-condition of regulatory approvals from the NDRC, MOC and SAFE. The key condition is approval by at least 75% independent H Shareholders (&lt;10% of all independent H Shareholders rejection). 
The offer price is final. Despite the premium, the offer is struck materially below net cash. Nevertheless, the irrevocable from the largest H Shareholder should help the offer get up.


Weiqiao Textile (2698 HK): Pre-Conditional Privatisation Offer at HK$3.50

Origin Energy Limited is an integrated energy company. The Company is an energy retailer in Australia across electricity, gas and LPG. Origin Energy also holds a generation portfolio and fuel position and a renewable energy portfolio, as well as unconventional gas and LNG interests.

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads - <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a>, <a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, <a href="https://www.smartkarma.com/entities/irc-ltd" target="_blank" data-smartkarma-citation="entities:20649:1" rel="noopener">Irc Ltd (1029 HK)</a>, <a href="https://www.smartkarma.com/entities/orecorp-ltd" target="_blank" data-smartkarma-citation="entities:8120:1" rel="noopener">Orecorp Ltd (ORR AU)</a>, <a href="https://www.smartkarma.com/entities/healius-ltd-6d4d947d-ad32-4aea-b2d8-265f5768b55e" target="_blank" data-smartkarma-citation="entities:14208:1" rel="noopener">Healius (HLS AU)</a>, <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>, <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>.
</li>
<li>Lowest spreads - <a href="https://www.smartkarma.com/entities/azure-minerals-ltd" target="_blank" data-smartkarma-citation="entities:16538:1" rel="noopener">Azure Minerals (AZS AU)</a>, <a href="https://www.smartkarma.com/entities/tietto-minerals-ltd" target="_blank" data-smartkarma-citation="entities:28006:1" rel="noopener">Tietto Minerals Ltd (TIE AU)</a>, <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>, <a href="https://www.smartkarma.com/entities/t-k-toka-co-ltd" target="_blank" data-smartkarma-citation="entities:18678:1" rel="noopener">T&amp;K Toka Co Ltd (4636 JP)</a>, <a href="https://www.smartkarma.com/entities/pact-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:692:1" rel="noopener">Pact Group Holdings (PGH AU)</a>, Taisho. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads - Eoflow (294090 KS), 111 Inc (YI US), Irc Ltd (1029 HK), Orecorp Ltd (ORR AU), Healius (HLS AU), Hollysys Automation Technologies (HOLI US), Origin Energy (ORG AU).

Lowest spreads - Azure Minerals (AZS AU), Tietto Minerals Ltd (TIE AU), Toyo Construction (1890 JP), T&amp;K Toka Co Ltd (4636 JP), Pact Group Holdings (PGH AU), Taisho. 


Merger Arb Mondays (4 Dec) - Origin, OreCorp, Healius, CIMC Vehicles, T&K Toka, Eoflow, Hollysys

Taisho Pharmaceutical Holdin / Event-Driven

Taisho Pharmaceutical Holdings Company Ltd. produces and sells pharmaceuticals, foods, and  other related products. The Company also provides insurance agency and information processing services and operates hotel businesses.

<ul>
<li>Japan Catalyst’s <a href="https://www.japancatalyst.com/pdf/JCI_TAISHO_20231201_eng.pdf" target="_blank" rel="noopener">press release</a> supports the idea of a <a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdin (4581 JP)</a> MBO but not the proposed offer price as it implies a P/B less than 1.0x.</li>
<li>The press release is a discovery exercise encouraging other like-minded shareholders to show their hand. The shares are trading marginally above the JPY8,620 offer.</li>
<li>While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5% premium to the undisturbed price.</li>
</ul>


Japan Catalyst’s press release supports the idea of a Taisho Pharmaceutical Holdin (4581 JP) MBO but not the proposed offer price as it implies a P/B less than 1.0x.
The press release is a discovery exercise encouraging other like-minded shareholders to show their hand. The shares are trading marginally above the JPY8,620 offer.
While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5% premium to the undisturbed price.


Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

Arun George
IPOs and Catalysts/Events
• Global Equity Research Ltd

EOFLOW/Medtronic Tender: Appeals Brief Is All Bark, No Bite

The appeal is Eoflow’s last roll of the dice. Eoflow’s arguments are rehashed from those the district court dismissed with balanced counterarguments.

Arun George

Chindata (CD US): Maximum Dissent Condition in Focus as Oasis Builds a Stake

The transaction received shareholder approval. Dissenting shareholders represent 22.79% of outstanding shares vs. the requirement of less than 12%...

Arun George

Weiqiao Textile (2698 HK): Pre-Conditional Privatisation Offer at HK$3.50

The offer price is final. Despite the premium, the offer is struck materially below net cash. Nevertheless, the irrevocable from the largest H...

Arun George

Merger Arb Mondays (4 Dec) - Origin, OreCorp, Healius, CIMC Vehicles, T&K Toka, Eoflow, Hollysys

This week, the highest gross spreads are Eoflow (215.5%), 111 (93.7%), IRC (22.9%), OreCorp (20.8%), Healius (18.7%), Hollysys (15.5%), Origin...

Arun George

Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump

While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5%...

Arun George