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

L'Occitane International S.A. is a global, natural and organic ingredient based cosmetics and well-being products enterprise.  The Company designs, manufactures and markets a wide range of cosmetics and well-being products based on natural and organic ingredients sourced principally from or near Provence.

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<a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> announced that the share alternative pre-condition was satisfied. However, The share alternative offer is at the offeror’s discretion and with the consent of the financing parties. </li>
<li>The share alternative offer poses a dilemma due to the requirement to satisfy the minimum acceptance condition while not breaching the upper limit of the share alternative offer.</li>
<li>The share alternative offer is a play on higher multiples by relisting the business. At HK$50.00, L’Occitane would trade in line with its median global beauty peers’ multiples.</li>
</ul>



L'Occitane (973 HK) announced that the share alternative pre-condition was satisfied. However, The share alternative offer is at the offeror’s discretion and with the consent of the financing parties. 
The share alternative offer poses a dilemma due to the requirement to satisfy the minimum acceptance condition while not breaching the upper limit of the share alternative offer.
The share alternative offer is a play on higher multiples by relisting the business. At HK$50.00, L’Occitane would trade in line with its median global beauty peers’ multiples.


L’Occitane (973 HK): Dilemma as the Share Alternative Pre-Condition Met

Malaysia Airports Holdings / Event-Driven

Malaysia Airports Holdings Berhad is an investment holding company.  The Company, through its subsidiaries, provides management, maintenance, and operation of designated airports.  Malaysia Airports also operates duty-free and non-duty free stores as well as provides food and beverage outlets at the airports.

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<a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings (MAHB MK)</a>’s pre-conditional voluntary conditional offer from a four-member consortium is RM11.00, a 5.8% premium to the last close. </li>
<li>Despite the offer representing an all-time high, the 90% minimum acceptance condition could be challenging due to the low takeover premium and discount to historical and peer multiples. </li>
<li>The consortium can overcome issues satisfying the minimum acceptance condition by bumping the offer or lowering the acceptance condition. </li>
</ul>



Malaysia Airports Holdings (MAHB MK)’s pre-conditional voluntary conditional offer from a four-member consortium is RM11.00, a 5.8% premium to the last close. 
Despite the offer representing an all-time high, the 90% minimum acceptance condition could be challenging due to the low takeover premium and discount to historical and peer multiples. 
The consortium can overcome issues satisfying the minimum acceptance condition by bumping the offer or lowering the acceptance condition. 


Malaysia Airports (MAHB MK): Pre-Conditional Voluntary Offer at RM11.00

Equity Capital Markets

MODEC, INC. manufactures petroleum and natural gas production machinery.  The Company specializes in extraction machinery for marine use, including semi-submersible and fixed platform types, and also machinery as on-board equipment on ships.

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<a href="https://www.smartkarma.com/entities/modec-inc" target="_blank" data-smartkarma-citation="entities:2840:1" rel="noopener">Modec Inc (6269 JP)</a> has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S Holdings (7003 JP)</a>, is the seller.</li>
<li>MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).</li>
</ul>



Modec Inc (6269 JP) has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, Mitsui E&amp;S Holdings (7003 JP), is the seller.
MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).


MODEC (6296 JP): A US$535 Million Secondary Offering

I'rom Group Co., Ltd. provides management services on clinical trials and staffing consulting services including providing nurses, pharmacists, and clinical pathologists to medical institutions as well as training medicalrelated staffs.  The Company also provides and leases facilities and finances for these who are to start their clinics.

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<a href="https://www.smartkarma.com/entities/i-rom-group-co-ltd" target="_blank" data-smartkarma-citation="entities:2686:1" rel="noopener">I'Rom Group (2372 JP)</a> recommended a <a href="https://www.smartkarma.com/entities/blackstone-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone (BX US)</a>-sponsored pre-conditional MBO at JPY2,800, a 49.5% premium to the undisturbed price. </li>
<li>Approvals under the competition laws of Japan and Australia are a precondition. The tender offer is expected to start in mid-June.</li>
<li>The offer is attractive and requires a 37% minority acceptance rate. While the timing of regulatory approvals is a risk, the transaction is a done deal.</li>
</ul>



I'Rom Group (2372 JP) recommended a Blackstone (BX US)-sponsored pre-conditional MBO at JPY2,800, a 49.5% premium to the undisturbed price. 
Approvals under the competition laws of Japan and Australia are a precondition. The tender offer is expected to start in mid-June.
The offer is attractive and requires a 37% minority acceptance rate. While the timing of regulatory approvals is a risk, the transaction is a done deal.


I'rom Group (2372 JP): Blackstone-Sponsored Pre-Conditional MBO at JPY2,800

ESR Group Limited operates as an integrated logistics real estate platform. The Company provides real estate private equity fund management, real estate investment trust, and other services. ESR Group conducts businesses in China, Japan, South Korea, Australia, Singapore, India, New Zealand, and other countries.

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<a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a> is on a trading halt. Press reports suggest a consortium featuring Starwood Capital Group and SSW Partners is considering a buyout.</li>
<li>Starwood and SSW are approaching other shareholders to join the consortium. The other members are likely Warburg Pincus, OMERS, Jinchu Shen, and Hwee Chiang Lim.</li>
<li>The offer is likely to be structured as a Cayman privatisation scheme. Our best guess is that an offer of at least HK$14.00 per share would be needed. </li>
</ul>



ESR Group (1821 HK) is on a trading halt. Press reports suggest a consortium featuring Starwood Capital Group and SSW Partners is considering a buyout.
Starwood and SSW are approaching other shareholders to join the consortium. The other members are likely Warburg Pincus, OMERS, Jinchu Shen, and Hwee Chiang Lim.
The offer is likely to be structured as a Cayman privatisation scheme. Our best guess is that an offer of at least HK$14.00 per share would be needed. 


ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid

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.