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>Changping Industrial’s offer for <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> opens at an unchanged HK$6.87, 4.7% below <a href="https://www.smartkarma.com/entities/org-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:17510:1" rel="noopener">ORG Technology Co., Ltd. A (002701 CH)</a>’s competing HK$7.21 offer. </li>
<li>Changping Industrial thinks deal fatigue may tip the balance in its favour. However, minorities will call Changping's bluff, as the offer at current terms has a low chance of success. </li>
<li>Despite the current posturing, Changping Industrial will likely need to bump above ORG’s offer marginally to succeed. Expect more twists and turns in this contested battle. </li>
</ul>


Changping Industrial’s offer for CPMC Holdings (906 HK) opens at an unchanged HK$6.87, 4.7% below ORG Technology Co., Ltd. A (002701 CH)’s competing HK$7.21 offer. 
Changping Industrial thinks deal fatigue may tip the balance in its favour. However, minorities will call Changping's bluff, as the offer at current terms has a low chance of success. 
Despite the current posturing, Changping Industrial will likely need to bump above ORG’s offer marginally to succeed. Expect more twists and turns in this contested battle. 


CPMC Holdings (906 HK): Poker Face off as Changping Industrial Launches Offer at Unchanged Terms

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the 6th December 2023, packaging play <strong><a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a></strong> announced a pre-conditional Offer of $6.87/share, in cash, from SASAC/NCSSF-backed Champion.</li>
<li>The <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0730/2024073000041.pdf" target="_blank" rel="noopener">Offer Document</a> is now out. This is not a Composite Document. A "Response Document" is expected in two weeks, which will include the IFA opinion. </li>
<li>All the above is moot. <strong><a href="https://www.smartkarma.com/entities/org-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:17510:1" rel="noopener">ORG Technology Co., Ltd. A (002701 CH)</a>'</strong>s superior HK$7.21/share Offer is currently navigating the necessary regulatory approvals. With irrevocables, ORG has 46.44% in the bag.</li>
</ul>


Back on the 6th December 2023, packaging play CPMC Holdings (906 HK) announced a pre-conditional Offer of $6.87/share, in cash, from SASAC/NCSSF-backed Champion.
The Offer Document is now out. This is not a Composite Document. A "Response Document" is expected in two weeks, which will include the IFA opinion. 
All the above is moot. ORG Technology Co., Ltd. A (002701 CH)'s superior HK$7.21/share Offer is currently navigating the necessary regulatory approvals. With irrevocables, ORG has 46.44% in the bag.


CPMC (906 HK): Champion's Offer Now Open. But All Eyes On ORG's Tilt

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Since all the Pre-Conditions have been fulfilled, Baosteel has taken a solid step towards the successful acquisition of CPMC. Comparatively, ORG could encounter resistance and uncertainties in the upcoming process.</li>
<li>The acquisition of CPMC by ORG cannot be completed by ORG and Zhang Wei alone.Without the “nod” of COFCO/SASAC, what ORG's going to do is equivalent to a “hostile takeover”. </li>
<li>ORG's acquisition of control of CPMC could go against the national strategy of "building strong alliances between SOEs". In fact, what ORG wants is for Baosteel to raise its Offer.</li>
</ul>


Since all the Pre-Conditions have been fulfilled, Baosteel has taken a solid step towards the successful acquisition of CPMC. Comparatively, ORG could encounter resistance and uncertainties in the upcoming process.
The acquisition of CPMC by ORG cannot be completed by ORG and Zhang Wei alone.Without the “nod” of COFCO/SASAC, what ORG's going to do is equivalent to a “hostile takeover”. 
ORG's acquisition of control of CPMC could go against the national strategy of "building strong alliances between SOEs". In fact, what ORG wants is for Baosteel to raise its Offer.


CPMC Holdings (906.HK) Privatization Update - The Story Behind the Delay of Offer Document Despatch

<ul>
<li>On 15 July, the precondition for Changping Industrial’s HK$6.87 offer for <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> was satisfied, but the despatch of the offer document was delayed until or before 30 July.</li>
<li>Since <a href="https://www.smartkarma.com/entities/org-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:17510:1" rel="noopener">ORG Technology Co., Ltd. A (002701 CH)</a> announced its HK$7.21 offer on 7 June, the shares have traded above Changping Industrial's offer on all but bar one trading day</li>
<li>Changping Industrial has three options: launch at unchanged terms (low probability), match ORG’s offer (medium probability) or bump marginally higher than ORG’s offer (high probability).</li>
</ul>


On 15 July, the precondition for Changping Industrial’s HK$6.87 offer for CPMC Holdings (906 HK) was satisfied, but the despatch of the offer document was delayed until or before 30 July.
Since ORG Technology Co., Ltd. A (002701 CH) announced its HK$7.21 offer on 7 June, the shares have traded above Changping Industrial's offer on all but bar one trading day
Changping Industrial has three options: launch at unchanged terms (low probability), match ORG’s offer (medium probability) or bump marginally higher than ORG’s offer (high probability).


CPMC Holdings (906 HK): Decisions, Decisions as Changping Industrial’s Offer Set to Open

<ul>
<li>ORG purchased 27% of CPMC's shares at HK$6/share in 2015.After about eight years, Baosteel's Offer Price was only HK$6.87/share. The annualized return rate was low, which obviously cannot satisfy ORG.</li>
<li>Baosteel and CPMC have been in talks for a long time - There may have been some "tacit agreement" between the two parties. The approval process is smooth so far.</li>
<li>For acquisitions/consolidation between SOEs, private enterprises usually have limited chances of winning.ORG has financial pressure and the approval process face uncertainties. There would be more negotiations among CPMC, ORG, Baosteel.</li>
</ul>


ORG purchased 27% of CPMC's shares at HK$6/share in 2015.After about eight years, Baosteel's Offer Price was only HK$6.87/share. The annualized return rate was low, which obviously cannot satisfy ORG.
Baosteel and CPMC have been in talks for a long time - There may have been some "tacit agreement" between the two parties. The approval process is smooth so far.
For acquisitions/consolidation between SOEs, private enterprises usually have limited chances of winning.ORG has financial pressure and the approval process face uncertainties. There would be more negotiations among CPMC, ORG, Baosteel.


CPMC Holdings (906.HK) Privatization - Some New Information Worth the Attention

China

CPMC Holdings Ltd. manufactures food packaging products.

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CPMC Holdings (906 HK)