Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>Back in September 2019, the spinoff/listing of <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> was predicated on the "unsustainable size" of <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> as a % of the JSE Shareholder Weighted Index (SWIX) - and to unlock value for shareholders.</p>
<p>Yesterday, Naspers and Prosus <a href="https://www.share-exchange-offer.com/wp-content/uploads/2021/05/naspers-announcement.pdf" target="_blank" rel="noopener">announced</a> a Proposed Voluntary Share Exchange Offer to Naspers Shareholders, which again addresses the SWIX situation, and if successful till increase Prosus' free float to 42.8%, with 59.7% of the economic interest of Prosus owned by that free float (and 40.3% owned by the free float of Naspers).</p>
<p>The unwieldy deal offers 45.4% of Naspers issued shares the option of converting shares into Prosus at a ratio of 2.27443x.</p>
<p>Assuming all the pieces neatly fit together, Naspers will own 57.2% of Prosus, and Prosus 49.5% of Naspers. </p>
<p>This resulting circularity is reminiscent of the <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> / <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a> cross-holding, which was collapsed earlier this year.</p>
<p>This time, the holders of Naspers super-voting shares are the "Keswicks". </p>
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Back in September 2019, the spinoff/listing of Prosus (PRX NA) was predicated on the "unsustainable size" of Naspers (NPN SJ) as a % of the JSE Shareholder Weighted Index (SWIX) - and to unlock value for shareholders.
Yesterday, Naspers and Prosus announced a Proposed Voluntary Share Exchange Offer to Naspers Shareholders, which again addresses the SWIX situation, and if successful till increase Prosus' free float to 42.8%, with 59.7% of the economic interest of Prosus owned by that free float (and 40.3% owned by the free float of Naspers).
The unwieldy deal offers 45.4% of Naspers issued shares the option of converting shares into Prosus at a ratio of 2.27443x.
Assuming all the pieces neatly fit together, Naspers will own 57.2% of Prosus, and Prosus 49.5% of Naspers. 
This resulting circularity is reminiscent of the Jardine Matheson Holdings (JM SP) / Jardine Strategic Holdings (JS SP) cross-holding, which was collapsed earlier this year.
This time, the holders of Naspers super-voting shares are the "Keswicks". 


Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

<p>As discussed in <em><a href="https://skr.ma/yN7Jw" target="_blank" rel="noopener">Jardine Matheson: Strategic Buyout Done</a></em>, after <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a> shareholders <a href="https://links.sgx.com/FileOpen/JSH.ashx?App=Announcement&amp;FileID=659247" target="_blank" rel="noopener">voted through</a>, as expected, the Offer from <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>, after the vote, Matheson said a number of shareholders in Strategic voted against the acquisition, but also that:</p>
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<p>a large number of shares voted against the resolution were held by investors who were not shareholders at the time of the announcement of the Acquisition on 8 March 2021. Some investors have indicated an intention to apply to the Court in Bermuda to appraise the fair value of their shares, in accordance with the process described in the shareholder circular issued by Jardine Strategic in connection with the Acquisition.</p>
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<p>I initially wrote "<em>Matheson appears to be suggesting that those who held shares before the announcement, and those who held after, potentially have different cases to argue</em>."</p>
<p>But after consulting with my colleague <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a>, I omitted this line, as it was effectively moot.</p>
<p>Matheson would have singled out these short-term investors - hedge funds - irrespectively. Yet, such a statement is irrelevant. All shareholders, as at the record date of the Special General Meeting, have the same rights to be treated fairly and rights to dissension.</p>
<p>I note some recent commentary in the media addressing Matheson's oblique reference to hedge funds, so I'll provide some commentary sourced from legal references.</p>
<p>Of greater importance is what these dissenters will cost Matheson at the end of the day.</p>
<p>More below the fold.</p>
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<p>I've extensively dealt with appraisal rights in the Cayman Islands in past insights, which can also provide guidance as to how dissension may be interpreted in Bermuda (where Strategic is incorporated):</p>
<p><em><a href="https://skr.ma/TDg1T" target="_blank" rel="noopener">Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value</a></em></p>
<p><em><a href="https://skr.ma/Hy3JW" target="_blank" rel="noopener">Trina Solar: Appraisal Rights Judgment Another Setback for Dissenters</a></em></p>
<p><em><a href="https://skr.ma/H7E1t" target="_blank" rel="noopener">Changyou (CYOU US): Short-Form Merger Dissent Now Permitted</a></em></p>

As discussed in Jardine Matheson: Strategic Buyout Done, after Jardine Strategic Holdings (JS SP) shareholders voted through, as expected, the Offer from Jardine Matheson Holdings (JM SP), after the vote, Matheson said a number of shareholders in Strategic voted against the acquisition, but also that:


a large number of shares voted against the resolution were held by investors who were not shareholders at the time of the announcement of the Acquisition on 8 March 2021. Some investors have indicated an intention to apply to the Court in Bermuda to appraise the fair value of their shares, in accordance with the process described in the shareholder circular issued by Jardine Strategic in connection with the Acquisition.


I initially wrote "Matheson appears to be suggesting that those who held shares before the announcement, and those who held after, potentially have different cases to argue."
But after consulting with my colleague Travis Lundy, I omitted this line, as it was effectively moot.
Matheson would have singled out these short-term investors - hedge funds - irrespectively. Yet, such a statement is irrelevant. All shareholders, as at the record date of the Special General Meeting, have the same rights to be treated fairly and rights to dissension.
I note some recent commentary in the media addressing Matheson's oblique reference to hedge funds, so I'll provide some commentary sourced from legal references.
Of greater importance is what these dissenters will cost Matheson at the end of the day.
More below the fold.

I've extensively dealt with appraisal rights in the Cayman Islands in past insights, which can also provide guidance as to how dissension may be interpreted in Bermuda (where Strategic is incorporated):
Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value
Trina Solar: Appraisal Rights Judgment Another Setback for Dissenters
Changyou (CYOU US): Short-Form Merger Dissent Now Permitted

<p><a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a>'s special general meeting (SGM) was held a short while ago in Bermuda. The vote was a foregone conclusion, given <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>'s ability to vote its 84.9% stake.</p>
<p>The resolution as set out in the Notice of Special General Meeting contained in the <a href="https://data.fca.org.uk/artefacts/NSM/Portal/NI-000021381/NI-000021381.pdf" target="_blank" rel="noopener">Circular</a> to shareholders on 18 March 2021 was duly <a href="https://links.sgx.com/FileOpen/JSH.ashx?App=Announcement&amp;FileID=659247" target="_blank" rel="noopener">passed</a>.</p>
<p><a href="https://www.jardines.com/assets/files/NewsAndEvents/corporate-press-releases/jardine-strategic/p210412.pdf" target="_blank" rel="noopener">92%</a> of shareholders voted for the resolution. It is not clear from this link if that is 92% of shareholders present and via proxy, or 92% of outstanding shares.</p>
<p>This is useful in knowing the level of dissension.</p>
<p>More below the fold.</p>

Jardine Strategic Holdings (JS SP)'s special general meeting (SGM) was held a short while ago in Bermuda. The vote was a foregone conclusion, given Jardine Matheson Holdings (JM SP)'s ability to vote its 84.9% stake.
The resolution as set out in the Notice of Special General Meeting contained in the Circular to shareholders on 18 March 2021 was duly passed.
92% of shareholders voted for the resolution. It is not clear from this link if that is 92% of shareholders present and via proxy, or 92% of outstanding shares.
This is useful in knowing the level of dissension.
More below the fold.

Equity Bottom-Up

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<p>This week in StubWorld ...</p>
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<p>Following the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">no-objection notice</a> from the SGX on the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">4 February</a> concerning its BeerCo IPO, <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> announced that the SGX has <a href="https://links.sgx.com/FileOpen/TB_Annoucement_Conditional_ETL_for_BeerCo.ashx?App=Announcement&amp;FileID=654525" target="_blank" rel="noopener">issued</a> its conditional eligibility-to-list letter for the potential listing.  </p>
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<p>Preceding my comments on ThaiBev are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Following the no-objection notice from the SGX on the 4 February concerning its BeerCo IPO, Thai Beverage (THBEV SP) announced that the SGX has issued its conditional eligibility-to-list letter for the potential listing.  




Preceding my comments on ThaiBev are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: ThaiBev’s BeerCo Spin-Off One Step Closer

Singapore

Jardine Matheson Holdings Limited is a multinational enterprise with a portfolio of businesses focused on the Asia-Pacific region. The Group's activities include financial services, supermarkets, consumer marketing, engineering and construction, automobile trading, insurance broking, property investment, and hotels.

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Jardine Matheson Holdings (JM SP)

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David Blennerhassett

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