Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>Back on the 19 January, <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>  <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02331570-2A1275617?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an unsolicited, highly conditional, non-binding, indicative proposal, from funds advised by CPE Capital (CPEC), which includes Macquarie Group’s infrastructure arm Macquarie Infrastructure and Real Assets (MIRA), by way of a Scheme, with an indicative cash price of $3.50/share. The proposal referenced a scrip alternative that would provide shareholders with the option of a mix of cash and scrip at a lower upfront price than a simple cash option.</p>
</div>
<div>
<p>On the 23rd of April, Bingo <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02366368-2A1294059?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">said</a> CPEC and MIRA had completed its due diligence, and that while commercial discussions are well-advanced, there could be no assurance that any transaction will result from these discussions.</p>
<h3>The New News</h3>
</div>
<div>
<p>Bingo <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02367278-2A1294514?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> this morning it has entered into Scheme with MIRA in a A$2.3bn (US$1.7bn) deal. Shareholders have the option to receive either A$3.45/share in cash for each share held, or a mix of cash and unlisted stock.</p>
<p>Bingo also intends to declare a fully franked special dividend of up to A$0.117/share, to be paid on or before the implementation of the Scheme. The consideration under the Scheme will be net of this dividend.</p>
<p>This looks done.</p>
<p>More below the fold.</p>
</div>


Back on the 19 January, Bingo Industries (BIN AU)  announced an unsolicited, highly conditional, non-binding, indicative proposal, from funds advised by CPE Capital (CPEC), which includes Macquarie Group’s infrastructure arm Macquarie Infrastructure and Real Assets (MIRA), by way of a Scheme, with an indicative cash price of $3.50/share. The proposal referenced a scrip alternative that would provide shareholders with the option of a mix of cash and scrip at a lower upfront price than a simple cash option.


On the 23rd of April, Bingo said CPEC and MIRA had completed its due diligence, and that while commercial discussions are well-advanced, there could be no assurance that any transaction will result from these discussions.
The New News


Bingo announced this morning it has entered into Scheme with MIRA in a A$2.3bn (US$1.7bn) deal. Shareholders have the option to receive either A$3.45/share in cash for each share held, or a mix of cash and unlisted stock.
Bingo also intends to declare a fully franked special dividend of up to A$0.117/share, to be paid on or before the implementation of the Scheme. The consideration under the Scheme will be net of this dividend.
This looks done.
More below the fold.


Bingo Industries (BIN AU): Macquarie Cleans Up


For the month of February, 20 new deals were discussed on Smartkarma with an overall announced deal size of ~US$31bn.


Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow-up discussions, or simply click on the insight link(s) below the name.






New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Vocus Communications (VOC AU) 
Telcos
2.6
Scheme
25.6%


Vocus Back In Focus As MIRA Takes A Turn








Hong Kong




Beijing Digital Telecom (6188 HK) 
Mobile devices
0.2
Possible MGO
7.0%


Beijing Digital (6188 HK): Possible Offer From Zhuhai SASAC



Kerry Logistics Network (636 HK) 
Logistics
2.2
Partial
11.22%


Kerry Logistics (636 HK): SF Holdings' Pre-Conditional Partial Offer



Sichuan Languang Justbon (2606 HK) 
Property services
0.7
MOU/Poss Offer
30%


Languang Justbon (2606 HK): Potential General Offer From Country Gardens






India








National Aluminium (NACL IN) 
Aluminium
0.1
Buyback Tender
30%


NALCO India Buyback Tender Offer: A Small Arb








Japan




Being Co Ltd (4734 JP) 
Software
0.1
Tender Offer
34.7%


MBO for Being Co (4734 JP): Tender Offer Is a Done Deal



Dynac Holdings Corporation (2675 JP) 
Restaurants
0.1
Tender Offer
11.5%


Dynac Corp (2675 JP) Tender Offer: Looks like a Done Deal



Japan Asia (3751 JP) 
Infrastructure
0.3
Tender Offer
1%


Japan Asia Group MBO Fails, Now JAG Against Murakami's Higher Bid 



Maeda Corp (1824 JP) &amp; Maeda Road Construction Co (1883 JP) &amp; Maeda Seisakusho (6281 JP) 
Construction
4.0
Merger
14% for Maeda Road


Maeda Corp/Road/Seisakusho - 3-Way Merger 1 Year After Hostile Takeover 



N Field Co Ltd (6077 JP) 
Nursing care
0.2
Tender Offer
42.2%


N Field (6077) Take-Private by Unison Capital - Fast Growth Long Runway Asset Going Not So Rich



Sakai Ovex (3408 JP) 
Textiles
0.2
Tender Offer
31.7%


Sakai Ovex MBO - Wrong Price (And the Bidder Knows It)



Sanken Electric (6707 JP) 
Semis
0.2
Partial Tender
17.1%


Effissimo Launches Unsolicited/Hostile Partial Tender On Sanken Electric



Tsukui Corp (2398 JP) 
Nursing care
0.5
Tender Offer
51.7%


Tsukui Holdings (2398) - Another CHEAP Japan Nursing Care Take-Private Deal



Unimat Retirement Community (9707 JP) 

Nursing care
0.1
Tender Offer
28.4%


MBO for Unimat (9707 JP): Deserves a Bump!


 



Europe








Aggreko PLC (AGK LN) 
Energy
3.2
Offer
39%


Aggreko: £2bn Potential Bid from PE Consortium



Arrow Global (ARW LN) 
Debt purchaser
0.8
Offer
36.2%


Arrow Global - TDR Capital: Preliminary Conditional Proposal



ASTM SpA (AT IM) 
Infrastructure
4.0
Offer
28.8%


ASTM SpA - Nuova Argo Finanziaria Takeout Offer, Trading Tight



Dialog Semiconductor (DLG GR) 
Semi
6.0
Offer
20.3%


Dialog Semiconductor - Renesas Electronics Recommended Cash Offer



Signature Aviation (SIG LN) 
Aviation services
4.7
Scheme
53%


Signature Aviation - PE Consortium Agreed Offer








US




Hollysys Automation Technolo (HOLI US) 
Automation
1.0
Offer
36.7%


Hollysys (HOLI US): Machine Earning


Source: Smartkarma Insights





The above does not include the possible deal for Brilliance China Automotive (1114 HK) (Brilliance China (1114 HK): Grilling Kidneys). 

The average premium for the new deals announced (or first discussed) in February was ~27.5%, with a year-to-date average of ~31%. This compares to the average premium for all deals in 2020 and 2019 of 31% and 31.5% respectively. 




Summary of News in February of Arb Situations On Smartkarma's Radar



(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation. Where a new insight was written on these names in July, I've included a link, in bold, to that insight in italics.)






Australia


Comments (with links to announcements &amp; insights)




3P Learning (3PL AU) 

22-Feb: 1H21 results




amaysim Australia (AYS AU) 

1-Feb: WAM Capital Ltd (WAM AU) Offer for amaysim Australia (AYS AU) is free of all defeating conditions. Here is the Bidder's Statement. Offer closes on the 30 March - unless extended. 




Asaleo Care Ltd (AHY AU) 

18-Feb: Asaleo (ASX: AHY): Essity's Revised Offer




Bingo Industries (BIN AU) 

22-Feb: 1H21 results




Coca Cola Amatil (CCL AU) 

16-Feb: Coca Cola Amatil: CCEP's Best &amp; Final Offer
17-Feb: Coca-Cola Amatil Takeover Offer Raised 5.9%, Seems Like a Done Deal




Think Childcare (TNK AU) 

20-Jan: Think Childcare (TNK AU): Bigger Bid by Busy Bees




Vitalharvest Freehold Trust (VTH AU) 

26-Feb: Non-binding Offer from ROC of A$1.08/share by way of a Scheme.




WPP AUNZ (WPP AU) 

25-Feb: FY20 results










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Jingneng Clean Energy (579 HK) 

22-Feb: Beijing Jingneng (579 HK): Low Voter Turn-Out Sees Spread Widening




Car Inc (699 HK) 

18-Feb: Car Inc (699 HK)'s Offer unconditional in all respects. Offeror (MBK) holds 52.11%. Offer closes on the 4 March.




China Logistics Property Holdings (1589 HK) 

No February update




China Machinery Engineering (1829 HK) 

3-Feb: Despatch of Composite Doc pushed out to 20 Jan 2022.




HKC Holdings (190 HK) 

5-Feb: Despatch of Scheme Doc pushed out to 30 April this year.




Huifu Payment Limited (1806 HK) 

19-Feb: Shareholders approved the Scheme at Huifu Payment Limited (1806 HK)'s Scheme Meeting. Cheques to be despatched on or before 8 April.




I.T Ltd (999 HK) 

19-Feb: Court to convene a meeting on the 4 March.




New Century REIT (1275 HK) 

17-Feb: Circular for New Century REIT (1275 HK) has been delayed until the 19 March - on or before. 




Polytec Asset Holdings (208 HK) 

11-Feb: As expected, Polytec Asset Holdings (208 HK) has extended the despatch of the Scheme Doc to 16 April.




Rivera Holdings (281 HK) 

5-Feb: Rivera Holdings (281 HK) Scheme Doc pushed way out to 7 June as the High Court has directed that the hearing of the originating summons for an order to issue its directions for convening the Court Meeting will only be held on 28 May 2021




SHK Hong Kong Industries (666 HK) 

11-Feb: SHK (666 HK): Scheme Doc Out, IFA Says Fair




China Traditional Chinese Medicine (570 HK) 

No February update




Zhejiang New Century Hotel Management Group (1158 HK) 

5-Feb: The pre-conditions for Zhejiang New Century Hotel Management Group (1158 HK) have been satisfied. Composite Doc to be despatched on ore before the 31 March, about a week earlier than my prior estimate. 




Zhuhai Holdings Investment (908 HK) 

11-Feb: As expected, the despatch of the Scheme Doc for Zhuhai Holdings Investment (908 HK) has been pushed back to the 21 April.










India


Comments (with links to insights)




Allcargo Logistics (AGLL IN) 

No February update




Engineers India (ENGR IN) 

No February update




INEOS Styrolution India Limited (INEOS IN) 

No February update




Vedanta Ltd (VEDL IN) 

19-Feb: Vedanta Soars Beyond Indicative Open Offer Level. Not Expensive










Japan


Comments (with links to announcements &amp; insights)




Cocokara Fine (3098 JP) 
2-Feb: Cocokara/​MatsuKiyo Deal Finally Coming?




Honshu Chemical Industry (4115 JP) 

14-Feb: Honshu Chemical - What WAS the Wrong Price Gets Wronger




Japan Asia (3751 JP) 

4-Feb: Overbid: JAG Special Committee Plays Stupid so Murakami Plays Hardball
20-Feb: Japan Asia Group MBO Fails, Now JAG Against Murakami's Higher Bid




Joban Kaihatsu (1782 JP) 

Tender Offer was successful.




Toa Oil Co Ltd (5008 JP) 

12-Feb: Toa Oil (5008) Tender - Has the Dog Caught the Car?
17-Feb: Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores 25 Feb: Toa Oil (5008) - Idemitsu Looking To The Next Attempt?




Tokyo Rope Mfg (5981 JP) 

3-Feb: Nippon Steel Corporation (5401 JP) replied to questions posed to it by Tokyo Rope Mfg (5981 JP) in the latter's Opinion Statement regarding NSC's tender offer.  It is quite clear, and quite non-combative, relatively speaking. 











Malaysia


Comments (with links to announcements)




Batu Kawan Bhd (BAK MK) 

5-Feb: Compulsory acquisition notice sent out




FGV Holdings Bhd (FGV MK) 

16-Feb: Offer extended until the 2 March 25-Feb: Offer extended until the 15 March












New Zealand


Comments (with links announcements)




Infratil Ltd (IFT NZ) 

4-Feb: Lots of interest in Tilt Renewables Ltd (TLT NZ) 












Philippines


Comments (with links announcements)




Lopez Holdings (LPZ PM) 

17-Feb:  There's been an amendment to the partial offer for Lopez Holdings (LPZ PM). The maximum to be acquired will now be 1.43bn shares or 31.5%.   
"the reduction is intended to address concerns and the risk that LPZ may still fall below the public ownership requirement despite the initial reduced maximum number of shares to be acquired."  The Tender Offer price remains at P3.85 per share. The Tender Offer period will be extended from February 19, 2021, to March 8, 2021.











Singapore


Comments (with links to announcements &amp; insights)




CEI Limited (CEI SP) 

15-Feb: Pre-cons met. Offer doc to be sent 14-21 from this date.
15-Feb: AEM's Privatization Deal for CEI Limited (CEI SP): Pre-Condition Satisfied




GL Ltd (GLL SP) 

4-Feb: Offer Doc for GL Ltd (GLL SP) is out. The Circular, which will include an IFA opinion, is expected to be despatched on or before the 18 Feb. 
18-Feb: The Circular is out for GL Ltd (GLL SP). The IFA says the Offer is not fair but reasonable.




Penguin International (PBS SP) 

24-Feb: Penguin International (PBS SP)'s Circular is out - independent directors and IFA recommend shareholders accept Emet Grace offer.




Soilbuild Business Space REIT (SBREIT SP) 

18-Feb: Soilbuild REIT: Scheme Doc Out. EGM Convened










Taiwan


Comments (with links to announcements &amp; insights)




Jih Sun Financial (5820 TT) 

24-Feb: The Taiwan Fair Trade Commission has "approved" the takeover of Jih Sun Financial (5820 TT) by Fubon Financial Holding Co (2881 TT). This is a little earlier than expected. Fubon Financial Deal for Jih Sun Gets TFTC Signoff





















North America


Comments (with links to announcements and insights)





51 Job Inc Adr (JOBS US) 

No February update




China Biologic Products (CBPO US) 

China Biologic calls EGM on 1 March to consider proposed take-private



HUYA Inc (HUYA US)
No February update



PNM Resources (PNM US) 
12-Feb: PNM Resources shareholders supported the integration with Avangrid, Iberdrola's US subsidiary. The approval represents another milestone in the integration process between the New Mexico and Texas power company and the Iberdrola group company.
The operation, which already has the approval of the Committee on Foreign Investments in the United States (CFIUS) and Hart Scott Rodino Clearance (HSR), expects to obtain all the necessary approvals at both the state and federal levels throughout 2021.




Sina Corp (Class A) (SINA US) 

22-Feb: What's Going On With Sina Corp?




Sogou Inc (SOGO US) 
4-Feb: FY20 results




Wanda Sports Group (WSG US) 
1-Feb: Offer to expire on the 26 Feb.






































<div>
<p>Yesterday's AFR reported a consortium led by Aussie PE outfit CPE Capital had made a $2bn+ Offer for waste collections and recycling group <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>.</p>
<p>Earlier today Bingo <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02331570-2A1275617?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">confirmed</a> an unsolicited, highly conditional, non-binding, indicative proposal, from funds advised by CPE, which includes Macquarie Group’s infrastructure arm Macquarie Infrastructure and Real Assets (MIRA), by way of a Scheme, with an indicative cash price of $3.50/share.</p>
</div>
<p>The proposal also references a scrip alternative that remains under development, which would provide shareholders with the option of a mix of cash and scrip at a lower upfront price than a simple cash option.</p>
<p>Conditions include due diligence and financing, with a minimum/maximum acceptance condition attached to the cash and scrip options. </p>
<p>Discussions between both parties remain ongoing.</p>
<div>
<p>More below the fold.</p>
</div>


Yesterday's AFR reported a consortium led by Aussie PE outfit CPE Capital had made a $2bn+ Offer for waste collections and recycling group Bingo Industries (BIN AU).
Earlier today Bingo confirmed an unsolicited, highly conditional, non-binding, indicative proposal, from funds advised by CPE, which includes Macquarie Group’s infrastructure arm Macquarie Infrastructure and Real Assets (MIRA), by way of a Scheme, with an indicative cash price of $3.50/share.

The proposal also references a scrip alternative that remains under development, which would provide shareholders with the option of a mix of cash and scrip at a lower upfront price than a simple cash option.
Conditions include due diligence and financing, with a minimum/maximum acceptance condition attached to the cash and scrip options. 
Discussions between both parties remain ongoing.

More below the fold.


Bingo Industries (BIN AU): CPE/MIRA's Scavenger Hunt

<div>According to the AFR, a consortium led by Aussie PE outfit CPE Capital (previously
<div>known as CHAMP Private Equity) <span>has made a $2bn+ Offer for waste collections and recycling group </span><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><span>.</span>
</div>
</div>
<div></div>
<div>CPE is no stranger to Bingo, having acquired its Banksmeadow processing facility in <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02150926-2A1175219?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">October 2019</a>, a divestment <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2995-02081134-2A1135804?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">required by the ACCC</a> after Bingo acquired Dial A Dump in February of that year.</div>
<div></div>
<div>
<div>The key hurdle to a successful tilt is Bingo's current valuation - 15.9x EBITDA and 41x PER on a forward basis is not by any stretch, a cheap proposition.  </div>
</div>
<div></div>
<div>More below the fold.</div>

According to the AFR, a consortium led by Aussie PE outfit CPE Capital (previously
known as CHAMP Private Equity) has made a $2bn+ Offer for waste collections and recycling group Bingo Industries (BIN AU).



CPE is no stranger to Bingo, having acquired its Banksmeadow processing facility in October 2019, a divestment required by the ACCC after Bingo acquired Dial A Dump in February of that year.


The key hurdle to a successful tilt is Bingo's current valuation - 15.9x EBITDA and 41x PER on a forward basis is not by any stretch, a cheap proposition.  


More below the fold.

Bingo Industries (ASX: BIN): Talking Trash

Macro and Australian equity strategist, Macro Strategy Advisors

Shane Lee

Macro and Australian equity strategist

Macro Strategy Advisors

Cross Asset Strategy

<ul class="">
<li>
<strong>Buy Australia for its Defensive Qualities.</strong> Australia outperforms during periods of global uncertainty and when global interest rates are falling.  Downside risk to the Banks has been taken out by the RBA and APRA.  Moreover, the threat to housing from a Labor Government did not materialise.  Longer-term headwinds remain, but Australia’s defensive attributes will be cherished during global trade uncertainties.</li>
<li>
<strong>Move Underweight Miners and Overweight Energy.</strong> We move from overweight to slightly underweight the Miners by removing <strong>S32</strong> and <strong>WHC</strong>.  Global demand is slowing and normally that would hit Resources.  However, supply disruptions in iron ore are continuing to put upward pressure on prices and oil supply seem threatened by US-Iran tension in the Middle East.  We retain overweight positions in <strong>BHP</strong> and <strong>RIO</strong>.</li>
<li>
<strong>Stay Neutral IT.</strong> The global tech sector has been a major casualty from the US-China trade war.  We limit our exposure to the sector with overweight positions in only <strong>WTC</strong> and <strong>TNE</strong>.  Like many Growth stocks, <strong>TNE</strong> has felt the market’s wrath by not raising guidance at half-year results.  We remain along for the ride.  <strong>WTC</strong> is on track after management said EBITDA would increase by 35% in FY19 and as it expanded into new products and geographies.</li>
<li>
<strong>Retain Defensive tilt. </strong>We retain our overweight to Property.  It has performed in line with our portfolio as bond yields have fallen and we expect it will perform even better if global uncertainties escalate forcing interest rates down further.  We retain 8.5% of our portfolio in the sector.</li>
<li>
<strong>It’s not too Late to Buy Domestic Cyclicals: </strong>The favourable election result in May and the RBA interest rate cut in June have lit up domestic cyclicals on the prospects that the cycle will extend further.  Most of these stocks still trade on PE multiples that are not stretched and the market seems to not appreciate how the consumer’s spending power will strengthen before Christmas.  We include <strong>JHB</strong> and <strong>CSR</strong> and retain <strong>CWY</strong> and <strong>BIN</strong> as for exposure to a better housing and consumer outlook. </li>
</ul>



Buy Australia for its Defensive Qualities. Australia outperforms during periods of global uncertainty and when global interest rates are falling.  Downside risk to the Banks has been taken out by the RBA and APRA.  Moreover, the threat to housing from a Labor Government did not materialise.  Longer-term headwinds remain, but Australia’s defensive attributes will be cherished during global trade uncertainties.

Move Underweight Miners and Overweight Energy. We move from overweight to slightly underweight the Miners by removing S32 and WHC.  Global demand is slowing and normally that would hit Resources.  However, supply disruptions in iron ore are continuing to put upward pressure on prices and oil supply seem threatened by US-Iran tension in the Middle East.  We retain overweight positions in BHP and RIO.

Stay Neutral IT. The global tech sector has been a major casualty from the US-China trade war.  We limit our exposure to the sector with overweight positions in only WTC and TNE.  Like many Growth stocks, TNE has felt the market’s wrath by not raising guidance at half-year results.  We remain along for the ride.  WTC is on track after management said EBITDA would increase by 35% in FY19 and as it expanded into new products and geographies.

Retain Defensive tilt. We retain our overweight to Property.  It has performed in line with our portfolio as bond yields have fallen and we expect it will perform even better if global uncertainties escalate forcing interest rates down further.  We retain 8.5% of our portfolio in the sector.

It’s not too Late to Buy Domestic Cyclicals: The favourable election result in May and the RBA interest rate cut in June have lit up domestic cyclicals on the prospects that the cycle will extend further.  Most of these stocks still trade on PE multiples that are not stretched and the market seems to not appreciate how the consumer’s spending power will strengthen before Christmas.  We include JHB and CSR and retain CWY and BIN as for exposure to a better housing and consumer outlook. 


Aussie Equities Model Portfolio Update (June): Buy Protection and Cyclical Extension

Australia

Bingo Industries Limited operates as a waste management and recycling company. The Company offers front and rear lift commercial waste bins and compactors to handle waste such as general waste, paper, cardboard, and co-mingled recyclables, as well as provides solutions for liquid waste such as oily waters, grease traps, wash waters, and chemicals.

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

Bingo Industries (BIN AU)