IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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

Hong Kong Television Network / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hong-kong-television-network-limited" target="_blank" data-smartkarma-citation="entities:12953:1" rel="noopener">Hong Kong Television Network (1137 HK)</a> has launched a share buyback to acquire a maximum of 100.0m shares (11.25% of shares) at HK$2.15, a 20.8% premium to the undisturbed price.</li>
<li>The offer is conditional on approval by the requisite majority of shareholders and the approval of the whitewash waiver. There is no minimum acceptance condition, and the offer price is final.</li>
<li>The offer is unattractive and is an inefficient use of cash to increase the co-founders’ grip on the shares. Nevertheless, the EGM vote is likely to get up.   </li>
</ul>



Hong Kong Television Network (1137 HK) has launched a share buyback to acquire a maximum of 100.0m shares (11.25% of shares) at HK$2.15, a 20.8% premium to the undisturbed price.
The offer is conditional on approval by the requisite majority of shareholders and the approval of the whitewash waiver. There is no minimum acceptance condition, and the offer price is final.
The offer is unattractive and is an inefficient use of cash to increase the co-founders’ grip on the shares. Nevertheless, the EGM vote is likely to get up.   


HKTV (1137 HK): Co-Founders' Ruse to Increase Their Grip Through a Share Buyback at HK$2.15

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> spiked 12.3% yesterday in response to media reports (like <a href="https://www.thestandard.com.hk/breaking-news/section/4/202702/China-Mobile-explores-acquiring-Hong-Kong-telecom-firm-HKBN%C2%A0" target="_blank" rel="noopener">this one</a>) that <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> was running a ruler over the company.</li>
<li>This follows Bloomberg reports last month and in May last year, that I Square's HGC Global Communications and numerous PE outfits were kicking tyres of the Hong Kong broadband play.</li>
<li>Over the weekend, Hong Kong's security chief was quoted as saying "the internet could become a major loophole when maintaining national security". <a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT (6823 HK)</a> is a potential privatisation candidate. </li>
</ul>



HKBN Ltd (1310 HK) spiked 12.3% yesterday in response to media reports (like this one) that China Mobile (941 HK) was running a ruler over the company.
This follows Bloomberg reports last month and in May last year, that I Square's HGC Global Communications and numerous PE outfits were kicking tyres of the Hong Kong broadband play.
Over the weekend, Hong Kong's security chief was quoted as saying "the internet could become a major loophole when maintaining national security". HKT (6823 HK) is a potential privatisation candidate. 


<ul>
<li>According to Bloomberg, KKR and PAG are considering bids for Hong Kong broadband play <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>.</li>
<li>Private equity firms, possibly including Stonepeak, are understood to be conducting due diligence on HKBN, which has a current market cap of ~US$1.6bn. </li>
<li>Increased broadband usage became a Covid trend. That looks set to continue. This is a steady business, with an attractive yield. </li>
</ul>


According to Bloomberg, KKR and PAG are considering bids for Hong Kong broadband play HKBN Ltd (1310 HK).
Private equity firms, possibly including Stonepeak, are understood to be conducting due diligence on HKBN, which has a current market cap of ~US$1.6bn. 
Increased broadband usage became a Covid trend. That looks set to continue. This is a steady business, with an attractive yield. 


<ul>
<li>Two hours before China Mobile's pre-conditional voluntary Offer announcement on the 2 December, <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>  <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1202/2024120202069.pdf" target="_blank" rel="noopener">flagged</a> a possible separate Offer from I Squared Asia-backed HGC Global Communication (HGC). </li>
<li>No price was mentioned, although HKBN and I Squared "are in discussions on the terms of the proposal (including the price)." The media is reporting a HK$5-HK$6/share price range.</li>
<li>Apart from anti-competition concerns via a HKBN/HGC tie-in; would HGC even get approval from the powers that be to proceed with a merger?</li>
</ul>


Two hours before China Mobile's pre-conditional voluntary Offer announcement on the 2 December, HKBN Ltd (1310 HK)  flagged a possible separate Offer from I Squared Asia-backed HGC Global Communication (HGC). 
No price was mentioned, although HKBN and I Squared "are in discussions on the terms of the proposal (including the price)." The media is reporting a HK$5-HK$6/share price range.
Apart from anti-competition concerns via a HKBN/HGC tie-in; would HGC even get approval from the powers that be to proceed with a merger?


HKBN (1310 HK): Just How Likely Is An I Squared Offer?

Forensic Accounting

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> was a logical suitor for <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>. A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.</li>
<li>China Mobile has a made a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1202/2024120203351.pdf" target="_blank" rel="noopener">pre-conditional voluntary Offer</a> at HK$5.23/share, a 40.97% premium to undisturbed. The price is final. </li>
<li>Pre-Cons are the usual suspects (NDRC, Mofcom &amp; SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN's listing. </li>
</ul>



China Mobile (941 HK) was a logical suitor for HKBN Ltd (1310 HK). A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.
China Mobile has a made a pre-conditional voluntary Offer at HK$5.23/share, a 40.97% premium to undisturbed. The price is final. 
Pre-Cons are the usual suspects (NDRC, Mofcom &amp; SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN's listing. 


HKBN (1310 HK): China Mobile's "Fair" Tendering Offer

Hong Kong

Hong Kong Television Network Limited, through its subsidiaries, provides international telecommunications services and fixed telecommunication network services. The Company's services include broadband Internet access, local VoIP, IP-TV and corporate data services, direct dial, international calling cards, and mobile call forwarding services.

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Hong Kong Television Network (1137 HK)

If HKBN Gets Taken Out, Who's Next?

Is $10/share for HKBN enough to kick out TPG? Maybe. And it's peanuts for the likes of China Mobile sitting on cash of US$33bn. Separately, HKT is...

David Blennerhassett

HKBN (1310 HK): KKR & PAG's Pipe Dreams

There is as yet, no firm Offer. Shares are up ~3%. It's a steady business, with solid shareholder backing, strong management, and a decent yield...

David Blennerhassett

HKBN (1310 HK): Just How Likely Is An I Squared Offer?

Don't expect a competing Offer from HGC. IF this can be wrapped up in around seven months, I'd pay up to HK$5.00/share - for a 15% annualised...

David Blennerhassett

HKBN (1310 HK): China Mobile's "Fair" Tendering Offer

Say a conservative six months to secure reg approvals, and an additional two months to complete the Offer - I'd pay ~HK$4.95/share - perhaps up to...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HKTV (1137 HK): Co-Founders' Ruse to Increase Their Grip Through a Share Buyback at HK$2.15

The offer is unattractive and is an inefficient use of cash to increase the co-founders’ grip on the shares. Nevertheless, the EGM vote is likely...

Arun George

If HKBN Gets Taken Out, Who's Next?

Is $10/share for HKBN enough to kick out TPG? Maybe. And it's peanuts for the likes of China Mobile sitting on cash of US$33bn. Separately, HKT is...

David Blennerhassett

HKBN (1310 HK): KKR & PAG's Pipe Dreams

There is as yet, no firm Offer. Shares are up ~3%. It's a steady business, with solid shareholder backing, strong management, and a decent yield...

David Blennerhassett

HKBN (1310 HK): Just How Likely Is An I Squared Offer?

Don't expect a competing Offer from HGC. IF this can be wrapped up in around seven months, I'd pay up to HK$5.00/share - for a 15% annualised...

David Blennerhassett

HKBN (1310 HK): China Mobile's "Fair" Tendering Offer

Say a conservative six months to secure reg approvals, and an additional two months to complete the Offer - I'd pay ~HK$4.95/share - perhaps up to...

David Blennerhassett