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

<p>On 19 April, <a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a>, which is controlled by billionaire Sarath Ratanavadi, announced a conditional voluntary tender offer to acquire all of <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>’s shares for THB65.00 cash per share, an 11.1% premium to the unaffected price of THB58.50 per share. As of 16 April, Gulf Energy’s shareholding in Intouch stood at 18.93% of the outstanding shares. </p><p>If the tender offer results in Gulf Energy holding 50% or more of Intouch’s total voting rights, Gulf Energy will be required to make tender offers for all the shares of <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl" target="_blank" data-smartkarma-citation="entities:947:1" rel="noopener">Advanced Info Service (ADVANC TB)</a> and <a href="https://www.smartkarma.com/entities/thaicom-pcl" target="_blank" data-smartkarma-citation="entities:18019:1" rel="noopener">Thaicom Pcl (THCOM TB)</a> based on the chain principle. The potential tender offer price for Advanced Info Services is THB122.86 per share, which is a -27% discount to the unaffected price of THB168 per share.</p><p>In response to the announcement, <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> which owns 21.00% of Intouch and 23.32% of Advanced Info Services, stated that it “<em>views its stakes in INTUCH and ADVANC as strategic investments and we believe in the long term outlook of the businesses.</em>” Singtel will review its strategic options to ensure that Intouch and Advanced Info Services shareholders get the full benefit of the intrinsic value of the businesses.</p><div class="content-highlight"><p>The launch of the Intouch tender offer is subject to key conditions precedents which are Gulf Energy shareholder approval (no less than three-quarters of the total votes from shareholders with no conflict of interests) and SEC waiver for the requirement to make a tender offer for Thaicom according to the chain principle. Post EGM approval for the tender, Gulf Energy may also buy Intouch shares before and after the tender. The tender offer has no minimum acceptance condition. Overall, we think the tender offer price is fair. </p></div>

On 19 April, Gulf Energy Development Public Company (GULF TB), which is controlled by billionaire Sarath Ratanavadi, announced a conditional voluntary tender offer to acquire all of Intouch Holdings (INTUCH TB)’s shares for THB65.00 cash per share, an 11.1% premium to the unaffected price of THB58.50 per share. As of 16 April, Gulf Energy’s shareholding in Intouch stood at 18.93% of the outstanding shares. If the tender offer results in Gulf Energy holding 50% or more of Intouch’s total voting rights, Gulf Energy will be required to make tender offers for all the shares of Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB) based on the chain principle. The potential tender offer price for Advanced Info Services is THB122.86 per share, which is a -27% discount to the unaffected price of THB168 per share.In response to the announcement, Singtel (ST SP) which owns 21.00% of Intouch and 23.32% of Advanced Info Services, stated that it “views its stakes in INTUCH and ADVANC as strategic investments and we believe in the long term outlook of the businesses.” Singtel will review its strategic options to ensure that Intouch and Advanced Info Services shareholders get the full benefit of the intrinsic value of the businesses.The launch of the Intouch tender offer is subject to key conditions precedents which are Gulf Energy shareholder approval (no less than three-quarters of the total votes from shareholders with no conflict of interests) and SEC waiver for the requirement to make a tender offer for Thaicom according to the chain principle. Post EGM approval for the tender, Gulf Energy may also buy Intouch shares before and after the tender. The tender offer has no minimum acceptance condition. Overall, we think the tender offer price is fair. 

Intouch’s Conditional Voluntary Tender Offer from Gulf Energy

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p>On the 26 June 2020, <a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> disclosed it held 147mn shares (~4.58%) in <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>. Gulf continued to increase its stake - and make public announcements after the fact - culminating in a holding of 15% on <a href="https://www.nationthailand.com/news/30402235" target="_blank" rel="noopener">28 January</a>.</p>
<p>In its FY20 results, the <a href="https://www.set.or.th/dat/news/202102/21018001.pdf" target="_blank" rel="noopener">management discussion</a> shed no new light as to their forward intention on Intouch.</p>
<p>Technically, Gulf could take its take all the way up to 24.99% before it was obligated to make an MGO - see <em><a href="https://skr.ma/m2vxP" target="_blank" rel="noopener">Quiddity M&amp;A Guide 2021: Thailand</a></em>.</p>
<p>But an energy company making a tilt for a satellite, internet, and telecommunications company?</p>
</div>
<hr>
<div>
<div>
<h3>The New News</h3>
<p>Gulf has <a href="https://www.set.or.th/set/pdfnews.do?newsId=16187886028860&amp;sequence=0" target="_blank" rel="noopener">announced</a> it intends to make a Voluntary Tender Offer (VTO) for shares not held in Intouch at Bt65/share. If it gets to 50%, it will make a downstream offer for <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl-ca1a971f-2f70-4565-b1fd-dda5b533acd3" target="_blank" data-smartkarma-citation="entities:27653:1" rel="noopener">Advanced Info Service PCL (ADVANC-R TB)</a> at Bt122.86/share. The VTO is conditional, amongst other things, on a waiver NOT to make a  downstream offer for <a href="https://www.smartkarma.com/entities/thaicom-pcl" target="_blank" data-smartkarma-citation="entities:18019:1" rel="noopener">Thaicom Pcl (THCOM TB</a>.</p>
<p>Bt65/share is bang-in-line with Intouch's NAV/share.</p>
<p>The Tender Offer has no minimum acceptance condition.</p>
<p>Gulf currently holds 18.93% (there was no prior announcement they had cleared 15%) of shares outstanding. If Singtel (21%) and Temasek (5.2%) tender, Gulf only needs another 4.87% to clear 50%.</p>
</div>
</div>
<div>
<p>Talk about being caught off-guard. I did not expect Gulf to lift its stake from 5% to 10%, then again to 15%. And I certainly did not expect a full Offer for Intouch.</p>
<p>More below the fold.</p>
</div>


On the 26 June 2020, Gulf Energy Development Public Company (GULF TB) disclosed it held 147mn shares (~4.58%) in Intouch Holdings (INTUCH TB). Gulf continued to increase its stake - and make public announcements after the fact - culminating in a holding of 15% on 28 January.
In its FY20 results, the management discussion shed no new light as to their forward intention on Intouch.
Technically, Gulf could take its take all the way up to 24.99% before it was obligated to make an MGO - see Quiddity M&amp;A Guide 2021: Thailand.
But an energy company making a tilt for a satellite, internet, and telecommunications company?




The New News
Gulf has announced it intends to make a Voluntary Tender Offer (VTO) for shares not held in Intouch at Bt65/share. If it gets to 50%, it will make a downstream offer for Advanced Info Service PCL (ADVANC-R TB) at Bt122.86/share. The VTO is conditional, amongst other things, on a waiver NOT to make a  downstream offer for Thaicom Pcl (THCOM TB.
Bt65/share is bang-in-line with Intouch's NAV/share.
The Tender Offer has no minimum acceptance condition.
Gulf currently holds 18.93% (there was no prior announcement they had cleared 15%) of shares outstanding. If Singtel (21%) and Temasek (5.2%) tender, Gulf only needs another 4.87% to clear 50%.



Talk about being caught off-guard. I did not expect Gulf to lift its stake from 5% to 10%, then again to 15%. And I certainly did not expect a full Offer for Intouch.
More below the fold.


Intouch Holdings: Gulf's Inexplicable Offer

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Intouch Holdings / Equity Capital Markets

<p>Temasek is looking to sell 135.2m shares of <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> worth about US$190m. We have covered the August 2019 selldown in:</p><ul><li>
<a href="https://www.smartkarma.com/insights/intouch-placement-attractive-holdco-discount-and-good-track-record-of-past-deals" target="_blank" data-smartkarma-citation="insights:31749" rel="noopener">Intouch Placement: Attractive Holdco Discount and Good Track Record of past Deals</a> </li></ul><p>In this note, we will revisit the discount to NAV of Intouch, discuss other deal dynamics, and run the deal through our framework.</p>

Temasek is looking to sell 135.2m shares of Intouch Holdings (INTUCH TB) worth about US$190m. We have covered the August 2019 selldown in:
Intouch Placement: Attractive Holdco Discount and Good Track Record of past Deals In this note, we will revisit the discount to NAV of Intouch, discuss other deal dynamics, and run the deal through our framework.

Intouch Placement - Wide Discount to NAV but Could Be Held Back by Overhang

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Thematic (Sector/Industry)

<p>Like summer, Q4 tends to be a good time for <em>most</em> media companies. Hollywood releases more blockbusters for the holiday season, and consumers are more willing to spend in the festive mood. Of course, some firms such as BEC also pay a lot of bonuses during this period, and that could hurt their earnings. These are some of our recent observations and expectations.</p><ul>
<li>
<strong>The TV series line-up isn't strong on the Thai side</strong>, but a lot of competition will disappear once the regulators pay off seven digital TV operators. If they also operate other channels, the cash infusion could prove useful.</li>
<li>
<strong>The movie line-up at cinemas look pretty strong,</strong> led by <em>Star Wars: Rise of Skywalker</em>, but don't expect it to beat historical record breakers like <em>Avengers Endgame</em> earlier this year. We spotted 8 potential blockbusters in the upcoming quarter released by Disney, Warner, and Sony. Nice if you are <a href="https://www.smartkarma.com/entities/major-cineplex-group-pcl" target="_blank" data-smartkarma-citation="entities:16662:1" rel="noopener">Major Cineplex Group (MAJOR TB)</a> </li>
<li>
<strong>Outsiders in related industries</strong> such as Thaicom and True have made interesting but divergent comments about the industry. Thaicom is positive, since digital TV operators were not their customers. True Visions seems surprisingly alarmed by the video streaming, since the data simply doesn't support it.</li>
<li>
<strong>Overall consumer sentiments </strong>are expected to remain weak this year, primarily due to the economy. Thailand is one of the slowest growing economies in the region apart from Singapore, and both export and tourism has been weak in 2019.</li>
</ul>

Like summer, Q4 tends to be a good time for most media companies. Hollywood releases more blockbusters for the holiday season, and consumers are more willing to spend in the festive mood. Of course, some firms such as BEC also pay a lot of bonuses during this period, and that could hurt their earnings. These are some of our recent observations and expectations.

The TV series line-up isn't strong on the Thai side, but a lot of competition will disappear once the regulators pay off seven digital TV operators. If they also operate other channels, the cash infusion could prove useful.

The movie line-up at cinemas look pretty strong, led by Star Wars: Rise of Skywalker, but don't expect it to beat historical record breakers like Avengers Endgame earlier this year. We spotted 8 potential blockbusters in the upcoming quarter released by Disney, Warner, and Sony. Nice if you are Major Cineplex Group (MAJOR TB) 

Outsiders in related industries such as Thaicom and True have made interesting but divergent comments about the industry. Thaicom is positive, since digital TV operators were not their customers. True Visions seems surprisingly alarmed by the video streaming, since the data simply doesn't support it.

Overall consumer sentiments are expected to remain weak this year, primarily due to the economy. Thailand is one of the slowest growing economies in the region apart from Singapore, and both export and tourism has been weak in 2019.


Thai Media Spotlight: Christmas Movie Line-Up & Life After Digital TV License Returns

<p>This week in StubWorld ...</p>
<ul>
<li>Temasek's latest divestment pushes <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>'s implied stub towards multi-year lows.</li>
</ul>
<p>Preceding my comments on Intouch and <a href="https://www.smartkarma.com/entities/cathay-pacific-airways" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
<div class="content-remarks">
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>

This week in StubWorld ...

Temasek's latest divestment pushes Intouch Holdings (INTUCH TB)'s implied stub towards multi-year lows.

Preceding my comments on Intouch and Cathay Pacific Airways (293 HK) are the weekly setup/unwind tables for Asia-Pacific Holdcos.

These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: Intouch Sell-Off As Investors Follow Temasek's Lead

Thailand

Thaicom PCL operates satellite communication business. The Company operates and provides satellite transponder services. Thaicom also provides Internet, satellite uplink/downlink, and telephone network services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Thaicom Pcl (THCOM TB)

Intouch’s Conditional Voluntary Tender Offer from Gulf Energy

Gulf Energy announced a conditional voluntary tender offer to acquire all of Intouch shares for THB65.00 cash per share. Overall, we think the...

Arun George

Intouch Holdings: Gulf's Inexplicable Offer

I don't get the logic behind the Offer. Still, this looks done. Trading at a 4.4%/11.2% gross/annualised spread, assuming five months to complete....

David Blennerhassett

Intouch Placement - Wide Discount to NAV but Could Be Held Back by Overhang

Temasek is looking to sell 135.2m shares of Intouch Holdings (INTUCH TB) worth about US$190m. We have covered the August 2019 selldown in: Intouch...

Zhen Zhou, Toh

Thai Media Spotlight: Christmas Movie Line-Up & Life After Digital TV License Returns

Like summer, Q4 tends to be a good time for most media companies. Hollywood releases more blockbusters for the holiday season, and consumers are...

Athaporn Arayasantiparb, CFA

StubWorld: Intouch Sell-Off As Investors Follow Temasek's Lead

This week in StubWorld ... Temasek's latest divestment pushes Intouch Holdings (INTUCH TB)'s implied stub towards multi-year lows. Preceding my...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)