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

PointsBet Holdings Ltd is a corporate bookmaker with operations in Australia, the United States, Canada and Ireland. PointsBet has developed a cloud-based wagering Platform through which it offers its clients sports, racing and iGaming products.

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<a href="https://www.smartkarma.com/entities/betr-entertainment-limited" target="_blank" data-smartkarma-citation="entities:41181:1" rel="noopener">BETR Entertainment (BBT AU)</a> has switched its <a href="https://www.smartkarma.com/entities/pointsbet-holdings-ltd" target="_blank" data-smartkarma-citation="entities:29102:1" rel="noopener">PointsBet Holdings (PBH AU)</a> offer to an all-scrip takeover offer at 3.81 BBT shares per PBH share, with a post-offer buyback option at A$1.22. </li>
<li>Betr’s claim that its offer is superior is debatable. <a href="https://www.smartkarma.com/entities/mixi-inc" target="_blank" data-smartkarma-citation="entities:602:1" rel="noopener">Mixi Inc (2121 JP)</a>’s offer is 8.6% above Betr’s at last close prices, and minorities accepting the buyback will be prorated.  </li>
<li>Betr’s offer is designed to torpedo Mixi’s scheme and takeover offer. Mixi will need to rethink its terms and likely drop its 50.1% minimum acceptance condition. </li>
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BETR Entertainment (BBT AU) has switched its PointsBet Holdings (PBH AU) offer to an all-scrip takeover offer at 3.81 BBT shares per PBH share, with a post-offer buyback option at A$1.22. 
Betr’s claim that its offer is superior is debatable. Mixi Inc (2121 JP)’s offer is 8.6% above Betr’s at last close prices, and minorities accepting the buyback will be prorated.  
Betr’s offer is designed to torpedo Mixi’s scheme and takeover offer. Mixi will need to rethink its terms and likely drop its 50.1% minimum acceptance condition. 


PointsBet (PBH AU): A Headache for Mixi as Betr Switches to a Takeover Offer

Equity Capital Markets

Foshan Haitian Flavouring & Food Company / Equity Capital Markets

Foshan Haitian Flavouring & Food Company Ltd. manufactures food seasonings. The Company develops, produces, and distributes condiments including soy sauce, oyster sauce, vinegar, flavoring sauce, chicken stock, monosodium glutamate, and oil.

Foshan Haitian Flavouring & Food Company (3288 HK)

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<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian Flavouring &amp; Food Company (3288 HK)</a> priced its H Share at HK$36.30 to raise HK$10,128.9 million (US$1.3 billion) in gross proceeds. The H Share will be listed tomorrow.</li>
<li>I discussed the H Share listing in <a href="https://www.smartkarma.com/insights/foshan-haitian-flavouring-h-share-listing-the-investment-case" target="_blank" data-smartkarma-citation="insights:187902" rel="noopener">Foshan Haitian Flavouring H Share Listing: The Investment Case</a>.</li>
<li>Haitian had the highest oversubscription rates among recent large AH listings. The AH discount implied by the offer is attractive.</li>
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Foshan Haitian Flavouring &amp; Food Company (3288 HK) priced its H Share at HK$36.30 to raise HK$10,128.9 million (US$1.3 billion) in gross proceeds. The H Share will be listed tomorrow.
I discussed the H Share listing in Foshan Haitian Flavouring H Share Listing: The Investment Case.
Haitian had the highest oversubscription rates among recent large AH listings. The AH discount implied by the offer is attractive.


Foshan Haitian Flavouring H Share Listing (3288 HK): Trading Debut

Mayne Pharma Group Ltd. develops and manufactures oral pharmaceuticals.  The Company produces branded generics, specialty generics, and active pharmaceutical ingredients.

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<li>To no one's surprise, the <a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> scheme vote comfortably passed. The scheme remains conditional on FIRB approval and no material adverse change (which Cosette alleges).  </li>
<li>The Mayne/Cosette court case wades into uncharted territory as it brings many firsts, such as the first MAC-related dispute to be heard in Australian courts with a qualified MAC threshold.</li>
<li>While Western case law burdens the buyer with establishing a MAC breach, it is unclear whether Mayne will get a favourable ruling, as Cosette could have a case. Tread carefully. </li>
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To no one's surprise, the Mayne Pharma (MYX AU) scheme vote comfortably passed. The scheme remains conditional on FIRB approval and no material adverse change (which Cosette alleges).  
The Mayne/Cosette court case wades into uncharted territory as it brings many firsts, such as the first MAC-related dispute to be heard in Australian courts with a qualified MAC threshold.
While Western case law burdens the buyer with establishing a MAC breach, it is unclear whether Mayne will get a favourable ruling, as Cosette could have a case. Tread carefully. 


Mayne Pharma (MYX AU): Entering Uncharted Territory as the Scheme Vote Passes

CaoCao Inc (CaoCao) is a ride-hailing firm incubated by the Zhejiang Geely Holding Group (Geely).

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<a href="https://www.smartkarma.com/entities/caocao-inc" target="_blank" data-smartkarma-citation="entities:42803:1" rel="noopener">CaoCao (2643 HK)</a> has launched its IPO to raise US$236 million at HK$41.94 per share. The shares will be listed on 25 June.</li>
<li>I previously discussed the IPO in <a href="https://www.smartkarma.com/insights/caocao-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:189909" rel="noopener">CaoCao IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/caocao-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:190152" rel="noopener">CaoCao IPO: The Bear Case</a>. </li>
<li>In this note, I present my forecasts and discuss valuation. My analysis suggests that CaoCao is at best fairly valued at the offer price. Therefore, avoid the IPO.</li>
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CaoCao (2643 HK) has launched its IPO to raise US$236 million at HK$41.94 per share. The shares will be listed on 25 June.
I previously discussed the IPO in CaoCao IPO: The Bull Case and CaoCao IPO: The Bear Case. 
In this note, I present my forecasts and discuss valuation. My analysis suggests that CaoCao is at best fairly valued at the offer price. Therefore, avoid the IPO.


NAKANO REFRIGERATORS CO., LTD. manufactures, wholesales, repairs, and maintains commercial freezers and refrigeration showcases.  The Company's products are used to encase foods such as vegetables, fruits, meat, ice cream, and other frozen foods.  Nakano Refrigerators, based in Tokyo, exports freezers and refrigeration showcases to China through its subsidiary.

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<a href="https://www.smartkarma.com/entities/nakano-refrigerators-co-ltd" target="_blank" data-smartkarma-citation="entities:4540:1" rel="noopener">Nakano Refrigerators (6411 JP)</a> has recommended a tender offer from Marunouchi Capital at JPY7,900, a 35.0% premium to the last close price.</li>
<li>The offer is attractive as it represents an all-time high and is above the midpoint of the IFA DCF valuation range.</li>
<li>An attractive offer and irrevocables (33.19% ownership ratio) pave the way for deal completion. The tender runs from 17 June to 29 July.</li>
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Nakano Refrigerators (6411 JP) has recommended a tender offer from Marunouchi Capital at JPY7,900, a 35.0% premium to the last close price.
The offer is attractive as it represents an all-time high and is above the midpoint of the IFA DCF valuation range.
An attractive offer and irrevocables (33.19% ownership ratio) pave the way for deal completion. The tender runs from 17 June to 29 July.


Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer

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

PointsBet (PBH AU): A Headache for Mixi as Betr Switches to a Takeover Offer

Betr’s claim that its offer is superior is debatable. Betr’s offer is designed to torpedo Mixi’s scheme and takeover offer. Mixi will need to...

Arun George

Mayne Pharma (MYX AU): Entering Uncharted Territory as the Scheme Vote Passes

While Western case law burdens the buyer with establishing a MAC breach, the Mayne/Cosette court case wades into uncharted territory, bringing many...

Arun George

CaoCao IPO (2643 HK): Valuation Insights

In this note, I present my forecasts and discuss valuation. My analysis suggests that CaoCao is at best fairly valued at the offer price....

Arun George

Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer

The offer is attractive as it represents an all-time high and is above the midpoint of the IFA DCF valuation range. An attractive offer and...

Arun George