Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Austal Limited is an emerging global defence prime contractor. The Group supplies vessel platforms such as the Littoral Combat Ship and the Joint High Speed Vessel to the United States Navy, an extensive range of patrol and auxiliary vessels to defence forces around the world, and installs and maintains military communications, radar and command and control systems.

<ul>
<li>Recently, I surmised FIRB would approve <a href="https://www.smartkarma.com/entities/sociedad-quimica-y-minera-de-chile-sa" target="_blank" data-smartkarma-citation="entities:27977:1" rel="noopener">Sociedad Quimica y Minera (SQM US)</a>/Hancock's bid for <a href="https://www.smartkarma.com/entities/azure-minerals-ltd" target="_blank" data-smartkarma-citation="entities:16538:1" rel="noopener">Azure (AZS AU)</a>; but ding <a href="https://www.smartkarma.com/entities/hanwha-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:12531:1" rel="noopener">Hanwha Ocean (042660 KS)</a>'s <a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal (ASB AU)</a> tilt. I'm batting 50%. </li>
<li>Whereas FIRB <a href="https://announcements.asx.com.au/asxpdf/20240430/pdf/0631wdsf6wd6kn.pdf" target="_blank" rel="noopener">gave the green light</a> for Azure this week; reportedly (no official ASX announcement as yet), the Aussie government is "not concerned" with Hanwha's acquisition. Austal gained 3% yesterday.</li>
<li>Even Austal didn't high hopes of securing Aussie approval. Presumably the US government is similarly onboard. This development also signals an expanding AUKUS security pact. </li>
</ul>


Recently, I surmised FIRB would approve Sociedad Quimica y Minera (SQM US)/Hancock's bid for Azure (AZS AU); but ding Hanwha Ocean (042660 KS)'s Austal (ASB AU) tilt. I'm batting 50%. 
Whereas FIRB gave the green light for Azure this week; reportedly (no official ASX announcement as yet), the Aussie government is "not concerned" with Hanwha's acquisition. Austal gained 3% yesterday.
Even Austal didn't high hopes of securing Aussie approval. Presumably the US government is similarly onboard. This development also signals an expanding AUKUS security pact. 


The Bigger Picture As Aussie Government "Approves' Hanwha Ocean's Austal Bid

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.

<ul>
<li>For the month of April 2024, 7 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn. </li>
<li>The average premium for the new transactions announced (or first discussed) in April was ~55%. The average premium YTD is ~42%. </li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of April 2024, 7 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn. 
The average premium for the new transactions announced (or first discussed) in April was ~55%. The average premium YTD is ~42%. 
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, April 2024: Austal, L'Occitane, Langham Hosp., Jastec, Mimasu, Best World, Isetan

<ul>
<li>After nearly six years of conjecture, rumour - plus the key shareholder (holding 72.63% of shares out) contemplating a takeover - we finally have an <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0429/2024042905713.pdf" target="_blank" rel="noopener">Offer</a> for <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>.</li>
<li>The price? $34/share, a 30.77% premium to undisturbed, and a figure a shade below the  HK$35/share flagged by Reuters last August deemed "<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0811/2023081101558.pdf" target="_blank" rel="noopener">false and without basis</a>". The price is final. 
</li>
<li>This takeover is a Voluntary General Offer. The key condition is securing 90% of disinterested shareholders holding 27.36%. 9.6% of that number have provided irrevocable undertakings or letters of support.  </li>
</ul>


After nearly six years of conjecture, rumour - plus the key shareholder (holding 72.63% of shares out) contemplating a takeover - we finally have an Offer for L'Occitane (973 HK).
The price? $34/share, a 30.77% premium to undisturbed, and a figure a shade below the  HK$35/share flagged by Reuters last August deemed "false and without basis". The price is final. 

This takeover is a Voluntary General Offer. The key condition is securing 90% of disinterested shareholders holding 27.36%. 9.6% of that number have provided irrevocable undertakings or letters of support.  


L'Occitane (973 HK): Geiger's $34/Share Offer

Pacific Smiles Group Limited owns and operates dental centers. The Company's centers provide preventative care, diagnosis and treatment for patients with a broad range of dental care requirements.

<ul>
<li>On the 18th December 2023, <a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>, an operator of dental centers, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02754994-2A1494957" target="_blank" rel="noopener">announced and rejected</a> a A$1.40/share non-binding proposal from Genesis Capital. Genesis subsequently increased its stake to 19.90%.</li>
<li>Genesis then bumped its NBIO to A$1.75/share on the 19 March and was granted due diligence on a non-exclusive basis. PSQ said it would support the revised terms if firmed. </li>
<li>
PSQ has now entered a Scheme with National Dental Care at A$1.90/share. The Offer also requires FIRB signing-off. But the proposal is a non-starter if Genesis rejects terms. </li>
</ul>


On the 18th December 2023, Pacific Smiles (PSQ AU), an operator of dental centers, announced and rejected a A$1.40/share non-binding proposal from Genesis Capital. Genesis subsequently increased its stake to 19.90%.
Genesis then bumped its NBIO to A$1.75/share on the 19 March and was granted due diligence on a non-exclusive basis. PSQ said it would support the revised terms if firmed. 

PSQ has now entered a Scheme with National Dental Care at A$1.90/share. The Offer also requires FIRB signing-off. But the proposal is a non-starter if Genesis rejects terms. 


Pacific Smiles (PSQ AU): A Brace Of Offers

CSR Limited manufactures and supplies buildings products. The Company's products include plasterboard, insulation, glass, fibre cement, bricks and rooftiles used in residential and commercial construction.

<ul>
<li>After pitching an indicative Offer to <a href="https://www.smartkarma.com/entities/csr-ltd" target="_blank" data-smartkarma-citation="entities:17380:1" rel="noopener">CSR (CSR AU)</a> shareholders of A$9/share by way of a Scheme on the <a href="https://www.saint-gobain.com/sites/saint-gobain.com/files/media/document/20240221_CSR_VA.pdf" target="_blank" rel="noopener">21st Feb</a>, <a href="https://www.smartkarma.com/entities/cie-de-saint-gobain" target="_blank" data-smartkarma-citation="entities:21547:1" rel="noopener">Saint-Gobain (SGO FP)</a> firmed terms on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02777351-2A1507472" target="_blank" rel="noopener">26th Feb</a>.  </li>
<li>$9.00 is a knockout Offer. The business combination has been unanimously approved by the boards of both companies. Conditions include CSR's shareholder approval and FIRB signing off. </li>
<li>The Scheme Booklet is now <a href="https://announcements.asx.com.au/asxpdf/20240426/pdf/062x9p8g3s3cxn.pdf" target="_blank" rel="noopener">out</a>, with a Scheme Meeting to be held on the 13th June. Expected implementation on the 9 July. IE says fair &amp; reasonable. </li>
</ul>


After pitching an indicative Offer to CSR (CSR AU) shareholders of A$9/share by way of a Scheme on the 21st Feb, Saint-Gobain (SGO FP) firmed terms on the 26th Feb.  
$9.00 is a knockout Offer. The business combination has been unanimously approved by the boards of both companies. Conditions include CSR's shareholder approval and FIRB signing off. 
The Scheme Booklet is now out, with a Scheme Meeting to be held on the 13th June. Expected implementation on the 9 July. IE says fair &amp; reasonable. 


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.

David Blennerhassett
Pan-Asia Catalysts/Events
• Quiddity Advisors

The Bigger Picture As Aussie Government "Approves' Hanwha Ocean's Austal Bid

I was wrong - Austal is not off-limits to a foreign takeover. Shares are 9.7% adrift of indicative terms. I'd be picking up shares here. The...

David Blennerhassett

(Mostly) Asia M&A, April 2024: Austal, L'Occitane, Langham Hosp., Jastec, Mimasu, Best World, Isetan

For the month of April, 7 new deals were discussed on Smartkarma with an overall deal size of just ~US$4bn. The average premium for the new deals...

David Blennerhassett

Pacific Smiles (PSQ AU): A Brace Of Offers

Trading tight at a 2% gross spread. IF Gensis firms terms, then this could go back & forth a few times, and likely clear $2. If small, illiquid...

David Blennerhassett

CSR (CSR AU): 13th June Shareholder Vote

Assuming regulatory approvals are granted - and there's no indication there is an issue here - this is done. Trading at a gross/annualised spread...

David Blennerhassett

The Bigger Picture As Aussie Government "Approves' Hanwha Ocean's Austal Bid

I was wrong - Austal is not off-limits to a foreign takeover. Shares are 9.7% adrift of indicative terms. I'd be picking up shares here. The...

David Blennerhassett

(Mostly) Asia M&A, April 2024: Austal, L'Occitane, Langham Hosp., Jastec, Mimasu, Best World, Isetan

For the month of April, 7 new deals were discussed on Smartkarma with an overall deal size of just ~US$4bn. The average premium for the new deals...

David Blennerhassett

L'Occitane (973 HK): Geiger's $34/Share Offer

If keeping to the SFC rules, this Offer may be open on the 20th May; and taking the view this turns unconditional on the first close (10th June),...

David Blennerhassett

Pacific Smiles (PSQ AU): A Brace Of Offers

Trading tight at a 2% gross spread. IF Gensis firms terms, then this could go back & forth a few times, and likely clear $2. If small, illiquid...

David Blennerhassett

CSR (CSR AU): 13th June Shareholder Vote

Assuming regulatory approvals are granted - and there's no indication there is an issue here - this is done. Trading at a gross/annualised spread...

David Blennerhassett