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

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-05-18/hong-kong-telco-hkbn-said-to-draw-interest-from-stonepeak-pag" target="_blank" rel="noopener">Bloomberg reported</a><a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> and PAG are carrying out due diligence on <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>, with a view to launching a privatisation bid.</li>
<li>HKBN has a relatively concentrated shareholder register which suggests a requirement for a high takeover premium.</li>
<li>Precedent transactions suggest a privatisation forward EV/EBITDA multiple of at least 10x, implying a minimum offer price of HK$11.80 per share, a 23% premium to the last close. </li>
</ul>



Bloomberg reportedKKR &amp; Co Inc (KKR US) and PAG are carrying out due diligence on HKBN Ltd (1310 HK), with a view to launching a privatisation bid.
HKBN has a relatively concentrated shareholder register which suggests a requirement for a high takeover premium.
Precedent transactions suggest a privatisation forward EV/EBITDA multiple of at least 10x, implying a minimum offer price of HK$11.80 per share, a 23% premium to the last close. 


Writing about High Quality Companies, Enlightened Capital

Enlightened Capital

Writing about High Quality Companies

I have more than 8 years of investing experience across Equities and Fixed Income (Investment Grade/High Yield). I have largely focused on Financials, Energy, and Utilities professionally, but I am interested in exploring new sectors to find attractive opportunities. Right now, the Payments sector is occupying much of my time.

Equity Bottom-Up

Apollo Global Management  / Equity Bottom-Up

<ul><li>APO is a top 5 alternative asset manager globally with $513bn of AUM as of 1Q22.</li><li>APO’s AUM is diversified across 73% of AUM in Yield strategies, 17% in Equity strategies, and 10% in Hybrid strategies.</li><li>APO recently acquired the remaining 65% of Athene (ATH), for $10.4bn (6x ’22 EPS), adding ~$200bn of insurance liabilities to APO’s balance sheet including fixed indexed annuities, fixed annuities, group annuities, and funding agreements.</li></ul>

APO is a top 5 alternative asset manager globally with $513bn of AUM as of 1Q22.APO’s AUM is diversified across 73% of AUM in Yield strategies, 17% in Equity strategies, and 10% in Hybrid strategies.APO recently acquired the remaining 65% of Athene (ATH), for $10.4bn (6x ’22 EPS), adding ~$200bn of insurance liabilities to APO’s balance sheet including fixed indexed annuities, fixed annuities, group annuities, and funding agreements.

<ul>
<li>The KKR consortium will offer A$88.00 per share less any dividends paid after the date of the indicative proposal. The offer less interim dividend of A$0.485 is A$87.52 per share.</li>
<li>The <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> Board has provided due diligence access. We think the offer is attractive and represents an all-time share price high. </li>
<li>The largest shareholder is said to be supportive. The gross spread of the offer less the interim dividend of A$87.52 to the last close price of A$80.00 is 9.4%. </li>
</ul>


The KKR consortium will offer A$88.00 per share less any dividends paid after the date of the indicative proposal. The offer less interim dividend of A$0.485 is A$87.52 per share.
The Ramsay Health Care (RHC AU) Board has provided due diligence access. We think the offer is attractive and represents an all-time share price high. 
The largest shareholder is said to be supportive. The gross spread of the offer less the interim dividend of A$87.52 to the last close price of A$80.00 is 9.4%. 


Ramsay’s Indicative Bid from the KKR Consortium

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> at A$88/share in cash.</li>
<li>The offer values <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> at A$20.14bn and is a premium of 36.7% to the last close. The premium is over 30% even using longer term VWAPs.</li>
<li>There will be changes to the S&amp;P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.</li>
</ul>


A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in Ramsay Health Care (RHC AU) at A$88/share in cash.
The offer values Ramsay Health Care (RHC AU) at A$20.14bn and is a premium of 36.7% to the last close. The premium is over 30% even using longer term VWAPs.
There will be changes to the S&amp;P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.


Ramsay Health Care (RHC AU): Indicative Proposal from KKR & Index Implications

Cleanaway Waste Management / Event-Driven

<ul>
<li>An <a href="https://www.afr.com/street-talk/cleanaway-in-kkr-s-crosshairs-20220419-p5aed3" target="_blank" rel="noopener">AFR article</a> claimed that <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> is preparing an offer for <a href="https://www.smartkarma.com/entities/transpacific-industries-group-ltd" target="_blank" data-smartkarma-citation="entities:19885:1" rel="noopener">Cleanaway Waste Management (CWY AU)</a>. The shares rose 5.9% to close at A$3.24.</li>
<li>KKR has a long history with Cleanaway. Private equity has recently acquired waste management companies that are increasingly viewed as “<em>infrastructure-like</em>’’. </li>
<li>Cleanaway’s scale, cash generation and modest leverage make it a target. A forward EV/EBITDA multiple of 15.8x, in line with <a href="https://www.smartkarma.com/entities/bingo-industries-ltd" target="_blank" data-smartkarma-citation="entities:24067:1" rel="noopener">Bingo Industries (BIN AU)</a>’s acquisition multiple, would imply A$3.92.</li>
</ul>


An AFR article claimed that KKR &amp; Co Inc (KKR US) is preparing an offer for Cleanaway Waste Management (CWY AU). The shares rose 5.9% to close at A$3.24.
KKR has a long history with Cleanaway. Private equity has recently acquired waste management companies that are increasingly viewed as “infrastructure-like’’. 
Cleanaway’s scale, cash generation and modest leverage make it a target. A forward EV/EBITDA multiple of 15.8x, in line with Bingo Industries (BIN AU)’s acquisition multiple, would imply A$3.92.


United States

KKR & Co. Inc. operates as an investment firm. The Company manages investments such as private equity, energy, infrastructure, real estate, credit strategies, and hedge funds. KKR & Co serves clients worldwide.

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KKR & Co (KKR US)

HKBN in the Crosshairs of KKR and PAG

Bloomberg reported that KKR and PAG could launch a privatisation bid. Precedent transactions suggest a privatisation forward EV/EBITDA multiple of...

Arun George

Apollo Global (APO)

APO is a top 5 alternative asset manager globally with $513bn of AUM as of 1Q22. APO’s AUM is diversified across 73% of AUM in Yield strategies,...

Enlightened Capital

Ramsay’s Indicative Bid from the KKR Consortium

The KKR consortium will offer A$88.00 less an interim dividend of A$0.485 for a total of A$87.52 per share. The offer is attractive. The gross...

Arun George

Ramsay Health Care (RHC AU): Indicative Proposal from KKR & Index Implications

A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of Ramsay Health Care (RHC AU) at A$88/share in cash....

Brian Freitas

KKR to Make a Move for Cleanaway?

An AFR article claimed that KKR is preparing an offer for Cleanaway. A forward EV/EBITDA multiple of 15.8x, in line with Bingo’s acquisition...

Arun George

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