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/star-cm-holdings-ltd" target="_blank" data-smartkarma-citation="entities:36658:1" rel="noopener">STAR CM Holdings (6698 HK)</a>, a variety program intellectual property creator and operator, was listed last December and promptly gained 475% by early August. All good so far.</li>
<li>Shares cratered on the 18 August (-23.4%) and are currently 76% adrift from its recent high. The reason? A viral clip from late pop diva Coco Lee discussing unfair treatment.</li>
<li>The music competition show, in which Coco appeared, pushed back on any impropriety; however, its broadcaster has temporarily suspended the program. This is no easy fix.</li>
</ul>



STAR CM Holdings (6698 HK), a variety program intellectual property creator and operator, was listed last December and promptly gained 475% by early August. All good so far.
Shares cratered on the 18 August (-23.4%) and are currently 76% adrift from its recent high. The reason? A viral clip from late pop diva Coco Lee discussing unfair treatment.
The music competition show, in which Coco appeared, pushed back on any impropriety; however, its broadcaster has temporarily suspended the program. This is no easy fix.


NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> sees a US$1bn selldown of shares on 29 December, due to a weird quirk in the way TOPIX and JPX Nikkei 400 are constructed and managed.</li>
<li>China's State Administration for Market Supervision is reviewing <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer (1337 HK)</a>'s privatisation as a simple case. With the key regulatory pre-condition all but satisfied, the Scheme timeline will significantly shorten. </li>
<li>The trade is to be long the back end of <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a>'s Tender Offer. BUY Shinsei Bank shares - outright, and vs large Japanese banks with higher PBRs. </li>
</ul>



NTT (9432 JP) sees a US$1bn selldown of shares on 29 December, due to a weird quirk in the way TOPIX and JPX Nikkei 400 are constructed and managed.
China's State Administration for Market Supervision is reviewing Razer (1337 HK)'s privatisation as a simple case. With the key regulatory pre-condition all but satisfied, the Scheme timeline will significantly shorten. 
The trade is to be long the back end of Shinsei Bank (8303 JP)'s Tender Offer. BUY Shinsei Bank shares - outright, and vs large Japanese banks with higher PBRs. 


Last Week in Event SPACE: NTT, Razer, Shinsei Bank, Evergrande, Bank of Kyoto, Nippon Express

<div>
On the 17 January, property developer <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>  <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0117/2021011700005.pdf" target="_blank" rel="noopener">announced</a> a privatisation offer by way of a Scheme from the controlling Oei family. The offer price of $8/share was a 120.39% premium to last close and around an eight-year high. An interim dividend of HK$0.13/share was also declared and would NOT be deducted from the cancellation price. 
</div>
<div>
The Scheme Document was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0331/2021033101856.pdf" target="_blank" rel="noopener">despatched</a> on the 31 March. The IFA said "fair &amp; reasonable". At the Scheme Meeting on the 23 April, disinterested shareholders overwhelmingly approved (99.36%) the Scheme. Done &amp; dusted.
</div>
But wait .....
In the HKEx <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0423/2021042302469.pdf" target="_blank" rel="noopener">announcement</a> detailing the results of the Meeting, HKC also states:
<blockquote>
The directions Order of the Bermuda Court dated 25 March 2021 provided that the presence, in person or by proxy, of the holders of a majority of voting power in respect of the shares issued and entitled to vote at the Court Meeting shall constitute a quorum for the conduct of business at the Court Meeting (‘‘Quorum Requirement’’). Given the number of Disinterested Scheme Shareholders who voted in person or by proxy at the Court Meeting may not comply with the Quorum Requirement, the Company has asked its Bermuda legal advisers to forthwith seek directions from the Court with respect to the convention and the validity of the results of the Court Meeting.
</blockquote>
There is no mention of a quorum condition to the Scheme in the Scheme Document. 
HKC was supposed to trade yesterday, but shares were suspended ahead of the open.
Is this new information a deal-breaker?


On the 17 January, property developer HKC Holdings (190 HK)  announced a privatisation offer by way of a Scheme from the controlling Oei family. The offer price of $8/share was a 120.39% premium to last close and around an eight-year high. An interim dividend of HK$0.13/share was also declared and would NOT be deducted from the cancellation price. 


The Scheme Document was despatched on the 31 March. The IFA said "fair &amp; reasonable". At the Scheme Meeting on the 23 April, disinterested shareholders overwhelmingly approved (99.36%) the Scheme. Done &amp; dusted.

But wait .....
In the HKEx announcement detailing the results of the Meeting, HKC also states:

The directions Order of the Bermuda Court dated 25 March 2021 provided that the presence, in person or by proxy, of the holders of a majority of voting power in respect of the shares issued and entitled to vote at the Court Meeting shall constitute a quorum for the conduct of business at the Court Meeting (‘‘Quorum Requirement’’). Given the number of Disinterested Scheme Shareholders who voted in person or by proxy at the Court Meeting may not comply with the Quorum Requirement, the Company has asked its Bermuda legal advisers to forthwith seek directions from the Court with respect to the convention and the validity of the results of the Court Meeting.

There is no mention of a quorum condition to the Scheme in the Scheme Document. 
HKC was supposed to trade yesterday, but shares were suspended ahead of the open.
Is this new information a deal-breaker?

China Machinery Engineering / Event-Driven

<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

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

In this insight, we highlight 26 Korean companies that are/may be seeking to find new owners through M&amp;As in 2021. Key sectors of M&amp;A in Korea in 2021 include consumer and industrial. We also provide a review of our M&amp;A research in 2020. We wrote 29 reports about the M&amp;As in 2020. The M&amp;A market in Korea is estimated to be about 35 trillion won in 2020, down 8% YoY. The local media have mentioned that the M&amp;A market in Korea could be nearly <a href="https://finance.naver.com/news/news_read.nhn?article_id=0004711778&amp;office_id=009&amp;mode=LSS2D&amp;type=0&amp;section_id=101&amp;section_id2=258&amp;section_id3=&amp;date=20201207&amp;page=3" target="_blank" rel="noopener">45 trillion won</a> in 2021, up 29% YoY, which would surpass the all-time high of 38 trillion won in 2019.

In this insight, we highlight 26 Korean companies that are/may be seeking to find new owners through M&amp;As in 2021. Key sectors of M&amp;A in Korea in 2021 include consumer and industrial. We also provide a review of our M&amp;A research in 2020. We wrote 29 reports about the M&amp;As in 2020. The M&amp;A market in Korea is estimated to be about 35 trillion won in 2020, down 8% YoY. The local media have mentioned that the M&amp;A market in Korea could be nearly 45 trillion won in 2021, up 29% YoY, which would surpass the all-time high of 38 trillion won in 2019.  

Review of Our M&A Research in 2020 & Korea M&A Market Outlook in 2021: What’s For Sale?

Hong Kong

Li & Fung Limited, through its subsidiaries, operates an export trading business.  The Company exports consumer products such as garments, fashion accessories, toys, games, sporting goods, home furnishings, handicrafts, shoes, travel goods, and tableware.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Li & Fung Ltd (494 HK)

STAR CM (6698 HK): Grave Accusations

For STAR CM, this is a material setback. One wonders what the company's spin will be to say everything is back on track. It will take some...

David Blennerhassett

Last Week in Event SPACE: NTT, Razer, Shinsei Bank, Evergrande, Bank of Kyoto, Nippon Express

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

HKC Holdings (190 HK): Quorum Quibbles

This order is not a statutory requirement but one imposed by the judge, arguably the directive smacks of "legislating from the bench". Presumably,...

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

Review of Our M&A Research in 2020 & Korea M&A Market Outlook in 2021: What’s For Sale?

In this insight, we highlight 26 Korean companies that are/may be seeking to find new owners through M&As in 2021. We also provide a review of our...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)