Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In a long-form merger for Cayman incorporated companies, dissenters can petition the Grand Court for determination of fair value. For short form merges, that avenue of dissent was not available. </li>
<li>But on the 28 January 2021, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a 'short-form' merger <em>were</em> entitled to dissent.</li>
<li>
<strong><a href="https://www.smartkarma.com/entities/changyou-com-ltd-ads" target="_blank" data-smartkarma-citation="entities:19287:1" rel="noopener">Changyou.com (CYOU US)</a></strong> appealed this decision in the Court of Appeal, and was dismissed. Then appealed to the Privy Council. In a judgement handed down yesterday, this was also dismissed. </li>
</ul>


In a long-form merger for Cayman incorporated companies, dissenters can petition the Grand Court for determination of fair value. For short form merges, that avenue of dissent was not available. 
But on the 28 January 2021, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a 'short-form' merger were entitled to dissent.

Changyou.com (CYOU US) appealed this decision in the Court of Appeal, and was dismissed. Then appealed to the Privy Council. In a judgement handed down yesterday, this was also dismissed. 


Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted

<ul>
<li>On the 2 January, <strong><a href="https://www.smartkarma.com/entities/tdcx-inc" target="_blank" data-smartkarma-citation="entities:34187:1" rel="noopener">TDCX (TDCX US)</a></strong>, a Singapore-headquartered digital customer experience (CX) provider, announced it had received a preliminary non-binding proposal from Laurent Junique to be acquired at $6.60/ADS.  </li>
<li>On the 1st March, TDCX <a href="https://investors.tdcx.com/news/financial-news/news-details/2024/TDCX-Inc.-Enters-into-Definitive-Merger-Agreement-for-Going-Private-Transaction/default.aspx" target="_blank" rel="noopener">entered in a definitive agreement</a> by way of a short form merger at US$7.20/ADS, a 48% premium to undisturbed.</li>
<li>As Laurent Junique holds 98.4% of the voting power, there is no shareholder vote on the merger. This is done. The Offer should close in the 2Q24.  </li>
</ul>


On the 2 January, TDCX (TDCX US), a Singapore-headquartered digital customer experience (CX) provider, announced it had received a preliminary non-binding proposal from Laurent Junique to be acquired at $6.60/ADS.  
On the 1st March, TDCX entered in a definitive agreement by way of a short form merger at US$7.20/ADS, a 48% premium to undisturbed.
As Laurent Junique holds 98.4% of the voting power, there is no shareholder vote on the merger. This is done. The Offer should close in the 2Q24.  


TDCX (TDCX US)'s $7.20/Share Short-Form Merger

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tdcx-inc" target="_blank" data-smartkarma-citation="entities:34187:1" rel="noopener"><strong>TDCX (TDCX US)</strong></a>, a Singapore-headquartered digital customer experience (CX) provider, has announced a preliminary non-binding proposal from Laurent Junique, founder/CEO, and largest shareholder (98.3% of the voting power).</li>
<li>Junique is offering US$6.60/ADS, a 39% premium to the 30-day VWAP, but a 63% discount to its IPO price a little over two years ago. </li>
<li>One issue dogging TDCX is the key man risk given Junique's almost absolute control. Now he's trying to take the company private on the cheap.</li>
</ul>



TDCX (TDCX US), a Singapore-headquartered digital customer experience (CX) provider, has announced a preliminary non-binding proposal from Laurent Junique, founder/CEO, and largest shareholder (98.3% of the voting power).
Junique is offering US$6.60/ADS, a 39% premium to the 30-day VWAP, but a 63% discount to its IPO price a little over two years ago. 
One issue dogging TDCX is the key man risk given Junique's almost absolute control. Now he's trying to take the company private on the cheap.


<div>
<p>Nearly a year after Chinese search-engine <a href="https://www.smartkarma.com/entities/sogou-inc" target="_blank" data-smartkarma-citation="entities:25996:1" rel="noopener">Sogou Inc (SOGO US)</a>  <a href="http://ir.sogou.com/2020-07-27-Sogou-Announces-Receipt-of-a-Preliminary-Non-Binding-Proposal-to-Acquire-the-Company" target="_blank" rel="noopener">announced</a> a preliminary non-binding proposal from <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, and around 9.5 months since <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115257193&amp;type=PDF&amp;symbol=SOGO&amp;companyName=Sogou+Inc.+American+Depositary+Shares+each+representing+one+Class+A&amp;formType=6-K&amp;dateFiled=2020-09-29&amp;CK=1713947" target="_blank" rel="noopener">entering</a> into a definitive agreement for a Going-Private Transaction, the Offer has been granted unconditional approval by the State Administration for Market Regulation (SAMR). </p>
</div>
<div>
<p>This Merger is in the form of a short-form merger as per section 233(7) of the <a href="https://www.cima.ky/upimages/commonfiles/CompaniesLaw2020Revision_1579811065.pdf" target="_blank" rel="noopener">Companies Law of the Cayman Islands</a> - there is no vote. With SAMR sign-off in the bag, this deal should become effective very shortly, and accordingly, is trading tight to terms.</p>
</div>
<div>
<p>Separately, <a href="https://www.smartkarma.com/entities/sohu-com-ltd" target="_blank" data-smartkarma-citation="entities:22853:1" rel="noopener">Sohu.com Inc (SOHU US)</a> will pocket ~US$1.2bn from the merger via its 33.8% equity stake in Sogou, versus its current market cap of US$933mn. <em>And that is after yesterday's 28% jump in price.</em></p>
</div>
<div>
<div>
<p>More below the fold.</p>
</div>
</div>


Nearly a year after Chinese search-engine Sogou Inc (SOGO US)  announced a preliminary non-binding proposal from Tencent (700 HK), and around 9.5 months since entering into a definitive agreement for a Going-Private Transaction, the Offer has been granted unconditional approval by the State Administration for Market Regulation (SAMR). 


This Merger is in the form of a short-form merger as per section 233(7) of the Companies Law of the Cayman Islands - there is no vote. With SAMR sign-off in the bag, this deal should become effective very shortly, and accordingly, is trading tight to terms.


Separately, Sohu.com Inc (SOHU US) will pocket ~US$1.2bn from the merger via its 33.8% equity stake in Sogou, versus its current market cap of US$933mn. And that is after yesterday's 28% jump in price.



More below the fold.



Tencent/Sogou: And That's (Finally) A Wrap

<div>
<p>Back on the 17 September 2020, IR solutions provider <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> announced it had received a preliminary non-binding <a href="https://sec.report/Document/0001104659-20-105912/" target="_blank" rel="noopener">Proposal</a> from DCP Capital Partners to acquire all of its shares for US$79.05/common share, a premium of 18.82% to 51job's 30-day VWAP, and a premium of 16.05% to 51job's last close.</p>
<p>The company <a href="https://ir.51job.com/ir/php/2020/PreReleaseq09212020.php" target="_blank" rel="noopener">formed</a> a special committee on the 21 September to evaluate the proposal and an independent financial advisor was appointed on the <a href="https://ir.51job.com/ir/php/2020/PreReleaseq09302020.php" target="_blank" rel="noopener">30 September</a>.</p>
</div>
<div>
<p>Then crickets. Not even a mention in its <a href="https://ir.51job.com/ir/doc/2021/2020Form20FEDGARFINAL20210423.pdf" target="_blank" rel="noopener">2020 annual report</a> on the 23 April this year. One would have thought given the material nature of this proposal warranted at least a one-liner.</p>
<p>I reached out to the IR for clarification and was told:</p>
<blockquote>
<p>The evaluation is ongoing. When there is an update or development, a public press release will be issued.</p>
</blockquote>
<h3>The New News</h3>
<p>51job <a href="https://ir.51job.com/ir/php/2021/PreRelease20210504.php?0504" target="_blank" rel="noopener">announced</a> yesterday an updated non-binding proposal which sees Ocean Link and CEO Rick Yan joining DCP in the consortium to take the company private. The Offer price of US$79.05/common share remains the same.</p>
<p>More below the fold.</p>
</div>


Back on the 17 September 2020, IR solutions provider 51 Job Inc Adr (JOBS US) announced it had received a preliminary non-binding Proposal from DCP Capital Partners to acquire all of its shares for US$79.05/common share, a premium of 18.82% to 51job's 30-day VWAP, and a premium of 16.05% to 51job's last close.
The company formed a special committee on the 21 September to evaluate the proposal and an independent financial advisor was appointed on the 30 September.


Then crickets. Not even a mention in its 2020 annual report on the 23 April this year. One would have thought given the material nature of this proposal warranted at least a one-liner.
I reached out to the IR for clarification and was told:

The evaluation is ongoing. When there is an update or development, a public press release will be issued.

The New News
51job announced yesterday an updated non-binding proposal which sees Ocean Link and CEO Rick Yan joining DCP in the consortium to take the company private. The Offer price of US$79.05/common share remains the same.
More below the fold.


51job's Buyout: Offer Price Unchanged In Updated Proposal

China

Changyou.com Ltd. develops online computer games.  The Company licenses its massively multi-player online role playing games.

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Changyou.com (CYOU US)

Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted

This decision reminds Offerors seeking to take a company private that dissension will be available to shareholders dissatisfied with the price at...

David Blennerhassett

TDCX (TDCX US): Laurent Junique's NBIO

TDCX is trading at a 4.3% gross spread to terms. This is being done too cheaply. It should get bumped. But I'm not sure that it will.

David Blennerhassett

Tencent/Sogou: And That's (Finally) A Wrap

The gross spread to terms is only 1%, but this is a done deal. I think this can become effective in a matter of weeks. Sohu's NAV discount is at...

David Blennerhassett

51job's Buyout: Offer Price Unchanged In Updated Proposal

Trading at a gross spread of 15.9%. With a seasoned player such as Ocean Link now in the mix, plus the CEO, a definitive agreement looks more...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted

This decision reminds Offerors seeking to take a company private that dissension will be available to shareholders dissatisfied with the price at...

David Blennerhassett

TDCX (TDCX US)'s $7.20/Share Short-Form Merger

The effective date for the merger of TDCX is expected to occur (no sooner than) 20 days from the latest SEC filing (see discussions). As the...

David Blennerhassett

TDCX (TDCX US): Laurent Junique's NBIO

TDCX is trading at a 4.3% gross spread to terms. This is being done too cheaply. It should get bumped. But I'm not sure that it will.

David Blennerhassett

Tencent/Sogou: And That's (Finally) A Wrap

The gross spread to terms is only 1%, but this is a done deal. I think this can become effective in a matter of weeks. Sohu's NAV discount is at...

David Blennerhassett

51job's Buyout: Offer Price Unchanged In Updated Proposal

Trading at a gross spread of 15.9%. With a seasoned player such as Ocean Link now in the mix, plus the CEO, a definitive agreement looks more...

David Blennerhassett