Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano International (709 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0818/2022081800161.pdf" target="_blank" rel="noopener">announced</a> 1H22 net profit of HK$97mn compared to  HK$60mn in 1H21.</li>
<li>Of interest is the declaration of an interim dividend of HK$0.085/share.</li>
<li>The ex-dividend date is the 20 September. Whether you get the dividend plus the Offer Price depends when the Offer closes (or is extended), and/or whether the Offer turns Unconditional.</li>
</ul>



Giordano International (709 HK) has announced 1H22 net profit of HK$97mn compared to  HK$60mn in 1H21.
Of interest is the declaration of an interim dividend of HK$0.085/share.
The ex-dividend date is the 20 September. Whether you get the dividend plus the Offer Price depends when the Offer closes (or is extended), and/or whether the Offer turns Unconditional.


Giordano (709 HK): Interim Divy - But Perhaps Not If You Tender

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano International (709 HK)</a>’s 1H22 net profit of HK$97 million was within the HK$91-101 million positive profit range. The IFA noted that interims do not change its advice.</li>
<li>The Board surprisingly declared an interim dividend of HK$0.085 per share. As the ex-div falls after the final closing date, shareholders who accept the offer will not receive the dividend. </li>
<li>The incrementally positive outlook and dividend highlight Giordano’s value. The results have pushed our deal break/intrinsic value to align with the VGO price. </li>
</ul>



Giordano International (709 HK)’s 1H22 net profit of HK$97 million was within the HK$91-101 million positive profit range. The IFA noted that interims do not change its advice.
The Board surprisingly declared an interim dividend of HK$0.085 per share. As the ex-div falls after the final closing date, shareholders who accept the offer will not receive the dividend. 
The incrementally positive outlook and dividend highlight Giordano’s value. The results have pushed our deal break/intrinsic value to align with the VGO price. 


Giordano’s Improving Outlook and Surprising Dividend Provide Deal-Break Support

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano International (709 HK)</a>’s voluntary conditional from the Cheng Yu Tung family (24.57% of outstanding shares) at HK$1.88 per share is open with a first closing date of 5 September.</li>
<li>Crucially, the offeror will not increase the offer price. In combination with an ongoing retail recovery, the low-ball offer has little chance of meeting the 50%+ minimum acceptance threshold.</li>
<li>While the IFA says the offer is fair and reasonable, key directors will not accept the offer. A deal break implies, at most, another 10% downside to the last close.</li>
</ul>



Giordano International (709 HK)’s voluntary conditional from the Cheng Yu Tung family (24.57% of outstanding shares) at HK$1.88 per share is open with a first closing date of 5 September.
Crucially, the offeror will not increase the offer price. In combination with an ongoing retail recovery, the low-ball offer has little chance of meeting the 50%+ minimum acceptance threshold.
While the IFA says the offer is fair and reasonable, key directors will not accept the offer. A deal break implies, at most, another 10% downside to the last close.


Giordano’s Conditional Offer Open, Price Declared Final, Unlikely to Meet 50%+ Voting Threshold

<ul>
<li>On the 23 June, the Cheng family made an underwhelming voluntary conditional Offer of $1.88/share for <a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano International (709 HK)</a>. </li>
<li>The Offer is conditional on the family getting to more than 50% via tendering, and the Cheng's (and concert parties) control 24.57%.  </li>
<li>The Composite Document is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0815/2022081500070.pdf" target="_blank" rel="noopener">out</a> with a first close on the 5 September.  The Offer Price has now been declared final. That's a surprise.</li>
</ul>


On the 23 June, the Cheng family made an underwhelming voluntary conditional Offer of $1.88/share for Giordano International (709 HK). 
The Offer is conditional on the family getting to more than 50% via tendering, and the Cheng's (and concert parties) control 24.57%.  
The Composite Document is now out with a first close on the 5 September.  The Offer Price has now been declared final. That's a surprise.


Giordano (709 HK): Offer Doc Out. Terms Declared Final

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.</li>
<li>The highest spreads are <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>, <a href="https://www.smartkarma.com/entities/alliance-aviation-services-ltd" target="_blank" data-smartkarma-citation="entities:20401:1" rel="noopener">Alliance Aviation Services (AQZ AU)</a>, <a href="https://www.smartkarma.com/entities/narhex-life-sciences-ltd" target="_blank" data-smartkarma-citation="entities:9728:1" rel="noopener">Resapp Health (RAP AU)</a>, <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>, <a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a>, Link Admin. </li>
<li>Lowest gross spreads are <a href="https://www.smartkarma.com/entities/hwa-hong-corp-ltd" target="_blank" data-smartkarma-citation="entities:6648:1" rel="noopener">Hwa Hong Corp (HWAH SP)</a>, <a href="https://www.smartkarma.com/entities/excelpoint-technology-ltd" target="_blank" data-smartkarma-citation="entities:1774:1" rel="noopener">Excelpoint Technology (EXLP SP)</a>, <a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano International (709 HK)</a>, <a href="https://www.smartkarma.com/entities/mydeal-com-au-ltd" target="_blank" data-smartkarma-citation="entities:30939:1" rel="noopener">MyDeal.com.au Ltd (MYD AU)</a>, <a href="https://www.smartkarma.com/entities/cocoaland-holdings-bhd" target="_blank" data-smartkarma-citation="entities:493:1" rel="noopener">Cocoaland Holdings (COLA MK)</a>, <a href="https://www.smartkarma.com/entities/maca-ltd" target="_blank" data-smartkarma-citation="entities:11390:1" rel="noopener">MACA Ltd (MLD AU)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
The highest spreads are 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Resapp Health (RAP AU), Ramsay Health Care (RHC AU), Yashili International Holdings (1230 HK), Link Admin. 
Lowest gross spreads are Hwa Hong Corp (HWAH SP), Excelpoint Technology (EXLP SP), Giordano International (709 HK), MyDeal.com.au Ltd (MYD AU), Cocoaland Holdings (COLA MK), MACA Ltd (MLD AU). 


Merger Arb Mondays (01 Aug) - Genex, Yashili, Link Admin, VNET, Ramsay, Alliance Aviation

Hong Kong

Symphony Holdings Limited, through its subsidiaries, manufactures and trades footwear products.  The Company also invests in properties.

Sa Sa International Holdings Limited, through its subsidiaries, retails and wholesales cosmetics. The Company also provides beauty and health club services to members.

Dickson Concepts (International) Limited, through its subsidiaries, sells watches and fashion products.  The Company also trades luxury goods, and provides management and technical services.

Pou Sheng International (Holdings) Limited retails and wholesales sportswear, including sports footwear, apparel and accessories.

Glorious Sun Enterprises Limited, through its subsidiaries, retails and exports casual wear apparel.  The Company also manufactures casual wear products and trades fabric.

Oriental Watch Holdings Limited, through its subsidiaries, trades watches and invests in properties.

Goldlion Holdings Limited, through its subsidiaries, distributes and manufactures garments and accessories.  The Company also invests in properties and operates a commercial center with restaurants and a business center.

Emperor Watch & Jewellery Ltd retails luxurious branded watches, and offers design and sales of jewellery products.

Auto Italia Holdings Limited distributes brand-name products including motor vehicles. The Company serves customers in Hong Kong, Macau, mainland China, and elsewhere in Asia.

International Housewares Retail Company Limited operates retail houseware retail stores. The Company offers customers a variety of houseware products in Hong Kong, Singapore, West Malaysia, China and Macau.

International Housewares Retail (1373 HK)

PC Jeweller Ltd. manufacture, retails, and wholesale jewelry.  The Company sells jewelry through its showrooms and over the Internet.  PC Jeweller offers a wide range of products including gold jewellery, diamond jewellery and other jewellery including silver articles, with a focus on diamond jewellery and jewellery for weddings.

Beijing Bashi Media Co., Ltd. provides urban bus transportation and advertising services.  The Company also provides taxi, inter-provincial transportation, car rental, and other transportation related services.

Shinsegae International Co., Ltd. was spun off from Shinsegae in 1996.  The company imports and distributes famous foreign brands and manufactures/distribut es domestic brand.  The Company's line of business includes the wholesale distribution of men's and women's apparel.

UNITED ARROWS LTD., operates fashion stores, specializing in casual clothing and accessory for men and women.  The Company has stores nationwide.  Main forces are United Arrows, Green Label Relaxing and Chrome Hearts.

Kolao Holdings retails new and used cars, and provided repairs and maintenance services in Laos.  The company also retails motorcycles and automobile parts.

The Tile Shop Holdings, Inc. operates as a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories. The Company offers porcelain, glass, ceramic, travertine, and other natural stones. Tile Shop Holdings serves customers in the United States.

Fujian Zhangzhou Development Co., Ltd., trades automobile, manages and operates toll roads, produces and distributes tap water, and provides waste management services.

China Meidong Auto Holdings Limited is an automobile dealership and maintenance group in China.

PT Indomobil Sukses Internasional Tbk assembles, and distributes automobiles, buses, trucks, motorcycles, and their related parts. The Company provides automotive maintenance, financing, and rental services.  Indomobil also trades used cars.

China Yongda Automobiles Services Holdings Ltd. retails passenger vehicles. The Company sells new and used vehicles and offers automobile rentals. China Yongda Automobiles also provides service.

China Yongda Automobile Services Hldg (3669 HK)

Giordano International Limited, through its subsidiaries, retails and distributes casual apparel and accessories under theGiordano, Giordano Ladies, Giordano Junior, BSX and Concepts One brands.

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Giordano International (709 HK)

Giordano (709 HK): Interim Divy - But Perhaps Not If You Tender

The downside is limited here. If you buy here or lower, you are effectively buying for the back-end, not the Offer. I view the arb as risky...

David Blennerhassett

Giordano’s Improving Outlook and Surprising Dividend Provide Deal-Break Support

The declining gross spread does not reflect an increased probability of an unconditional offer but Giordano’s rising intrinsic value, which is...

Arun George

Giordano’s Conditional Offer Open, Price Declared Final, Unlikely to Meet 50%+ Voting Threshold

As the offeror will not increase the offer price, there is little chance of meeting the 50%+ minimum acceptance threshold. A deal break implies, at...

Arun George

Giordano (709 HK): Offer Doc Out. Terms Declared Final

The downside is probably limited here. I'd expect shares to trade down today given the terms have been declared final. If you buy here or lower,...

David Blennerhassett

Merger Arb Mondays (01 Aug) - Genex, Yashili, Link Admin, VNET, Ramsay, Alliance Aviation

This week, the highest gross spreads are VNET (55.0%), Alliance Aviation (47.5%), ResApp (27.0%), Ramsay (24.7%), Yashili (10.1%), Link Admin...

Arun George

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