Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Machinery Engineering / Event-Driven

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After <a href="https://www.smartkarma.com/entities/china-machinery-engineering-corp" target="_blank" data-smartkarma-citation="entities:10998:1" rel="noopener">China Machinery Engineering (1829 HK)</a>'s (CMEC) shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0108/2021010701436.pdf" target="_blank" rel="noopener">suspended</a> ahead of trading on the 8 January  "pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company", CMEC has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0113/2021011300422.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from its controlling shareholder, state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH.
The Offer price is HK$3.70/share, a 45.10% premium to last close, and a 118.93% premium to the average closing price over the previous 30 trading days. The Offer price will not be increased. A concurrent Offer for CMEC's domestic shares at RMB3.082692/share is also tabled.
CMEC has 4,125,700,000 shares out, comprising 908,270,000 H shares and 3,217,430,000 domestic shares.
SINOMACH holds 3.185bn domestic shares directly, and 32.174mn shares indirectly via China United. Together this totals 77.99% of the total voting interest in CNEC. 
SINOMACH does not hold any H  shares.
The pre-conditions, which cannot be waived, include approvals from NDRC, MoC, and SAFE.
As CMEC is PRC incorporated, this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders. There is no tendering acceptance condition attached to this delisting.
This appears a relatively clean deal. The Long Stop date is the 13 January 2022, but this should be completed well before. Merger by Absorption transactions are typically wrapped up in around four months.
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More below the fold.
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After China Machinery Engineering (1829 HK)'s (CMEC) shares were suspended ahead of trading on the 8 January  "pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company", CMEC has now announced a pre-conditional Offer from its controlling shareholder, state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH.
The Offer price is HK$3.70/share, a 45.10% premium to last close, and a 118.93% premium to the average closing price over the previous 30 trading days. The Offer price will not be increased. A concurrent Offer for CMEC's domestic shares at RMB3.082692/share is also tabled.
CMEC has 4,125,700,000 shares out, comprising 908,270,000 H shares and 3,217,430,000 domestic shares.
SINOMACH holds 3.185bn domestic shares directly, and 32.174mn shares indirectly via China United. Together this totals 77.99% of the total voting interest in CNEC. 
SINOMACH does not hold any H  shares.
The pre-conditions, which cannot be waived, include approvals from NDRC, MoC, and SAFE.
As CMEC is PRC incorporated, this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders. There is no tendering acceptance condition attached to this delisting.
This appears a relatively clean deal. The Long Stop date is the 13 January 2022, but this should be completed well before. Merger by Absorption transactions are typically wrapped up in around four months.


More below the fold.


China Machinery Engineering (1829 HK): Delisting Offer From Parent

China Renewable Energy Investment / Event-Driven

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<a href="https://www.smartkarma.com/entities/china-renewable-energy-inves" target="_blank" data-smartkarma-citation="entities:14033:1" rel="noopener">China Renewable Energy Investment (987 HK)</a> is a micro-cap clean energy play in China.
Last April, 55.66% of issued shares moved within CCASS, from HSBC into BEA. This is <a href="https://www.smartkarma.com/entities/hkc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14707:1" rel="noopener">Hkc Holdings (190 HK)</a>'s stake.
The movement may simply have been an administrative matter. But given the flurry of M&amp;A activity in the PRC renewable energy space, it was worth speculating on the matter.
Both <a href="https://www.smartkarma.com/entities/china-renewable-energy-inves" target="_blank" data-smartkarma-citation="entities:14033:1" rel="noopener">China Renewable Energy Investment (987 HK)</a> and <a href="https://www.smartkarma.com/entities/hkc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14707:1" rel="noopener">Hkc Holdings (190 HK)</a> are now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0113/2021011300128.pdf" target="_blank" rel="noopener">suspended</a> pursuant to the Hong Kong Code on Takeovers and Mergers.
Should an Offer be tabled, this would be the fifth Hong Kong-listed, clean-energy company subject to a privatisation or change of control in the last two years - and seventh in which interested parties have been circling.
As always, more below the fold.
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China Renewable Energy Investment (987 HK) is a micro-cap clean energy play in China.
Last April, 55.66% of issued shares moved within CCASS, from HSBC into BEA. This is Hkc Holdings (190 HK)'s stake.
The movement may simply have been an administrative matter. But given the flurry of M&amp;A activity in the PRC renewable energy space, it was worth speculating on the matter.
Both China Renewable Energy Investment (987 HK) and Hkc Holdings (190 HK) are now suspended pursuant to the Hong Kong Code on Takeovers and Mergers.
Should an Offer be tabled, this would be the fifth Hong Kong-listed, clean-energy company subject to a privatisation or change of control in the last two years - and seventh in which interested parties have been circling.
As always, more below the fold.





China Renewable Energy (987 HK): Possible Privatisation Offer

<a href="https://www.smartkarma.com/entities/china-machinery-engineering-corp" target="_blank" data-smartkarma-citation="entities:10998:1" rel="noopener">China Machinery Engineering (1829 HK)</a>'s (CMEC) shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0108/2021010701436.pdf" target="_blank" rel="noopener">suspended</a> ahead of trading this morning  "pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company".
CMEC is incorporated in the PRC, and as such, there are no rights to compulsorily acquire shares or to require an Offeror do so. The only mechanism available to privatise is via Merger by Absorption, incorporating a Scheme-like vote (≥ 75% for, ≤10% against) for the H shares. Such an Offer may or may not require an additional tendering acceptance condition.
CMEC's ultimate controlling shareholder is state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH, which holds 77.99% of shares out, via CMEC's domestic shares. SINOMACH holds no H shares. 
CMEC is up 56.4% since the 29 December, on larger-than-average volume.
Funny that.
The most interesting facet attached to CMEC is that it has (adjusted) net cash of HK$8.8bn as at 30 June 2020, compared to market cap of HK$10.5bn.  Should a firm offer unfold, it is doubtful it will fully reflect the underlying business in addition to that cash pile.
More below the fold.

China Machinery Engineering (1829 HK)'s (CMEC) shares were suspended ahead of trading this morning  "pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company".
CMEC is incorporated in the PRC, and as such, there are no rights to compulsorily acquire shares or to require an Offeror do so. The only mechanism available to privatise is via Merger by Absorption, incorporating a Scheme-like vote (≥ 75% for, ≤10% against) for the H shares. Such an Offer may or may not require an additional tendering acceptance condition.
CMEC's ultimate controlling shareholder is state-owned Chinese National Machinery Industry Corporation, also known as SINOMACH, which holds 77.99% of shares out, via CMEC's domestic shares. SINOMACH holds no H shares. 
CMEC is up 56.4% since the 29 December, on larger-than-average volume.
Funny that.
The most interesting facet attached to CMEC is that it has (adjusted) net cash of HK$8.8bn as at 30 June 2020, compared to market cap of HK$10.5bn.  Should a firm offer unfold, it is doubtful it will fully reflect the underlying business in addition to that cash pile.
More below the fold.

China Machinery Engineering (1829 HK): Possible Offer

Beijing Jingneng Clean Energy / Event-Driven

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Following a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0703/2020070300108.pdf" target="_blank" rel="noopener">suspension</a> on the 3 July this year pursuant to the Code on Takeovers and Mergers, <a href="https://www.smartkarma.com/entities/beijing-jingneng-clean-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:16316:1" rel="noopener">Beijing Jingneng Clean Energy (579 HK)</a>, an SOE utility, subsequently <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0706/2020070602025.pdf" target="_blank" rel="noopener">announced</a> it had received a letter from Beijing Energy Holdings (BEH), its controlling shareholder, of an intention to make a Conditional General Offer.
Late last night, a voluntary conditional offer was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1117/2020111701054.pdf" target="_blank" rel="noopener">announced</a> at HK$2.70/share, a 70.89% premium to the undisturbed price. The Offer price is final. No dividends are expected during the Offer period.
Jingneng is incorporated in the PRC, and as such, there are no rights to compulsorily acquire shares or to require an Offeror do so. The only mechanism available to privatise is via a Merger by Absorption, incorporating a Scheme-like vote (≥ 75% for, ≤10% against). Additionally, as this is a "voluntary conditional offer", a tendering condition of 90% is also present.
This looks done. There is just a question mark over timing.
More below the fold.
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Following a suspension on the 3 July this year pursuant to the Code on Takeovers and Mergers, Beijing Jingneng Clean Energy (579 HK), an SOE utility, subsequently announced it had received a letter from Beijing Energy Holdings (BEH), its controlling shareholder, of an intention to make a Conditional General Offer.
Late last night, a voluntary conditional offer was announced at HK$2.70/share, a 70.89% premium to the undisturbed price. The Offer price is final. No dividends are expected during the Offer period.
Jingneng is incorporated in the PRC, and as such, there are no rights to compulsorily acquire shares or to require an Offeror do so. The only mechanism available to privatise is via a Merger by Absorption, incorporating a Scheme-like vote (≥ 75% for, ≤10% against). Additionally, as this is a "voluntary conditional offer", a tendering condition of 90% is also present.
This looks done. There is just a question mark over timing.
More below the fold.


Beijing Jingneng (579 HK): Privatisation Offer From Parent

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.

<a href="https://www.smartkarma.com/entities/beijing-jingneng-clean-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:16316:1" rel="noopener">Beijing Jingneng Clean Energy (579 HK)</a>/BJCE is the largest gas-fired heat and power supplier in Beijing and the leading wind power operator in China. After market close, BJCE announced a conditional voluntary cash general offer from Beijing Energy Holding, the controlling shareholder. Beijing Energy Holding will offer HK$2.70 in cash for each H-share, a premium of 11.57% to the last close price of HK$2.42 per H-share and a premium of 70.89% to the unaffected price of HK$1.58 per H-share (6 July prior to the announcement of a possible privatisation bid). This potential privatisation joins a list of recent SOE privatisations of clean energy companies - <a href="https://www.smartkarma.com/entities/huadian-fuxin-energy-corp-ltd" target="_blank" data-smartkarma-citation="entities:59:1" rel="noopener">Huadian Fuxin Energy Corp (816 HK)</a>,  <a href="https://www.smartkarma.com/entities/huaneng-renewables-corp-h" target="_blank" data-smartkarma-citation="entities:7542:1" rel="noopener">Huaneng Renewables Corp H (958 HK)</a> and CP Clean Energy.<div class="content-highlight">The key condition precedent will be approval by at least 75% disinterested H-shareholders (&lt;10% of all disinterested H-shareholders rejection) and minimum acceptance of at least 90% of H-shares held by disinterested H-shareholders. Due to an attractive offer price, we think that offer will garner enough acceptances to become unconditional.  </div>

Beijing Jingneng Clean Energy (579 HK)/BJCE is the largest gas-fired heat and power supplier in Beijing and the leading wind power operator in China. After market close, BJCE announced a conditional voluntary cash general offer from Beijing Energy Holding, the controlling shareholder. Beijing Energy Holding will offer HK$2.70 in cash for each H-share, a premium of 11.57% to the last close price of HK$2.42 per H-share and a premium of 70.89% to the unaffected price of HK$1.58 per H-share (6 July prior to the announcement of a possible privatisation bid). This potential privatisation joins a list of recent SOE privatisations of clean energy companies - Huadian Fuxin Energy Corp (816 HK),  Huaneng Renewables Corp H (958 HK) and CP Clean Energy.The key condition precedent will be approval by at least 75% disinterested H-shareholders (&lt;10% of all disinterested H-shareholders rejection) and minimum acceptance of at least 90% of H-shares held by disinterested H-shareholders. Due to an attractive offer price, we think that offer will garner enough acceptances to become unconditional.  

Beijing Jingneng Clean Energy’s Voluntary Conditional Offer

China

Huadian Fuxin Energy Corp. Ltd. is an electric company. The Company is engaged in electricity  production & sales, power facilities construction, electricity technology development and  renewable energy generation projects development.

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Huadian Fuxin Energy Corp (1994343D HK)

China Machinery Engineering (1829 HK): Delisting Offer From Parent

Expect CMEC to trade around $3.45-3.50, or a 6-7% gross spread, and an 18-23% annualised. This is still being done too cheaply, given the large...

David Blennerhassett

China Renewable Energy (987 HK): Possible Privatisation Offer

Shares are suspended. I think an Offer needs to be pitched closer to $0.30/share, around a four-year high, and a premium to last close in line with...

David Blennerhassett

China Machinery Engineering (1829 HK): Possible Offer

Shares are suspended so there is nothing to do here. I think the Offer needs to be pitched closer to $4/share to dislodge Cape Ann. It will still...

David Blennerhassett

Beijing Jingneng (579 HK): Privatisation Offer From Parent

Currently trading at a gross/annualised spread of 7.6%/18.9%, assuming the transaction takes five and a half months to complete. This appears a...

David Blennerhassett

Beijing Jingneng Clean Energy’s Voluntary Conditional Offer

BJCE announced a conditional voluntary cash general offer from Beijing Energy Holding at HK$2.70. Due to an attractive offer price, we think that...

Arun George

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