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/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (2196 HK)</a> has made a<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0624/2024062401217.pdf" target="_blank" rel="noopener"> HK$24.60/share Offer</a> (best &amp; final), in cash, for H-shares not held in <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>. A scrip alternative may be afforded. </li>
<li>As Henlius is PRC-incorporated, this Offer is structured as a Merger by Absorption, involving a Scheme-like vote for independent H-shareholders. There is no tendering condition.
</li>
<li>Pre-Conditions include NDRC, MoC, and SAFE. The Long Stop date to secure these conditions is 30th April 2025. That's way too conservative. This should be wrapped up around mid 4Q24.</li>
</ul>



Shanghai Fosun Pharmaceutical (2196 HK) has made a HK$24.60/share Offer (best &amp; final), in cash, for H-shares not held in Shanghai Henlius Biotech (2696 HK). A scrip alternative may be afforded. 
As Henlius is PRC-incorporated, this Offer is structured as a Merger by Absorption, involving a Scheme-like vote for independent H-shareholders. There is no tendering condition.

Pre-Conditions include NDRC, MoC, and SAFE. The Long Stop date to secure these conditions is 30th April 2025. That's way too conservative. This should be wrapped up around mid 4Q24.


Henlius Biotech (2696 HK): Fosun Pharma's "Fair" Offer

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/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> disclosed a pre-conditional privatisation offer by <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a> at HK$24.60, a 36.7% premium to the undisturbed price. The offer price is final. </li>
<li>The key condition is approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). There is no minimum acceptance condition. </li>
<li>Long term investors will be unimpressed as the offer is half the HK$49.60 IPO price. However, shareholders with blocking stakes should be supportive partly because of the share alternative option.</li>
</ul>



Shanghai Henlius Biotech (2696 HK) disclosed a pre-conditional privatisation offer by Shanghai Fosun Pharmaceutical (Group) (2196 HK) at HK$24.60, a 36.7% premium to the undisturbed price. The offer price is final. 
The key condition is approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). There is no minimum acceptance condition. 
Long term investors will be unimpressed as the offer is half the HK$49.60 IPO price. However, shareholders with blocking stakes should be supportive partly because of the share alternative option.


Henlius (2696 HK): Fosun Pharma’s HK$24.60 Offer at Around Half the IPO Price

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>There are many rumors about Henlius’s trading halt, but Fosun Pharma had applied for the resumption of trading in H Shares, which makes us confused whether this is really privatization.</li>
<li>Henlius is in “an awkward position” in capital market. Fosun is to blame for Henlius's low valuation. The high debt problem makes the profits generated from drug sales meaningless.</li>
<li>If Henlius cannot break away from the system controlled by Fosun, the complexity of corporate governance brought about by the relationship between Henlius and Fosun would inevitably affect investment judgment.</li>
</ul>


There are many rumors about Henlius’s trading halt, but Fosun Pharma had applied for the resumption of trading in H Shares, which makes us confused whether this is really privatization.
Henlius is in “an awkward position” in capital market. Fosun is to blame for Henlius's low valuation. The high debt problem makes the profits generated from drug sales meaningless.
If Henlius cannot break away from the system controlled by Fosun, the complexity of corporate governance brought about by the relationship between Henlius and Fosun would inevitably affect investment judgment.


Shanghai Henlius Biotech (2696.HK) - Behind the Trading Halt and Privatization Rumor

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” The likely bidder is Fosun Pharma.</li>
<li>A merger by absorption would require approval by at least 75% independent H Shareholders (&lt;10% of all independent H Shareholders rejection). There could also be a 90% minimum acceptance condition. </li>
<li>The shares are 62% below the IPO price. However, shareholders with blocking stakes would welcome an offer suggesting a 30-40% takeover premium would be sufficient.</li>
</ul>



Shanghai Henlius Biotech (2696 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” The likely bidder is Fosun Pharma.
A merger by absorption would require approval by at least 75% independent H Shareholders (&lt;10% of all independent H Shareholders rejection). There could also be a 90% minimum acceptance condition. 
The shares are 62% below the IPO price. However, shareholders with blocking stakes would welcome an offer suggesting a 30-40% takeover premium would be sufficient.


Henlius (2696 HK): Privatisation by Fosun Pharma?

<ul>
<li>Biopharmaceutical outfit <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> is <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0523/2024052300005.pdf" target="_blank" rel="noopener">currently suspended</a> pursuant to the Takeovers Code.</li>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a> holds ~60% in Henlius, mostly via domestic shares. Co-founders and Qatar Authority hold ~28% and 8% the H shares respectively.</li>
<li>IF an Offer were to unfold, it would be the third in this space in the past two months, after Offers for <a href="https://www.smartkarma.com/entities/sciclone-pharmaceuticals-holdings-limited" target="_blank" data-smartkarma-citation="entities:17351:1" rel="noopener">Sciclone (6600 HK)</a> and <a href="https://www.smartkarma.com/entities/yichang-hec-changjiang-pharmaceutical" target="_blank" data-smartkarma-citation="entities:21040:1" rel="noopener">Yichang HEC (1558 HK)</a>,</li>
</ul>


Biopharmaceutical outfit Shanghai Henlius Biotech (2696 HK) is currently suspended pursuant to the Takeovers Code.

Shanghai Fosun Pharmaceutical (Group) (2196 HK) holds ~60% in Henlius, mostly via domestic shares. Co-founders and Qatar Authority hold ~28% and 8% the H shares respectively.
IF an Offer were to unfold, it would be the third in this space in the past two months, after Offers for Sciclone (6600 HK) and Yichang HEC (1558 HK),


China

Yantai Dongcheng Pharmaceutical Co Ltd is an enterprise group that combines pharmaceutical R&D, production, marketing, and capital operations across the fields of biochemical API, chemical synthetic drugs, and modern Chinese medicine.

Yantai Dongcheng Pharmaceuticl Gp (002675 CH)

Shanghai Junshi Biosciences Co., Ltd. operates as a biopharmaceutical company. The Company develops and sells small molecule drugs, antibody drug conjugates, and other products. Shanghai Junshi Biosciences markets its products worldwide.

3SBio, Inc. is a biotechnology company located in China. The Company focuses on mammalian cell-based biopharmaceuticals in the biotechnology industry. 3SBio also develops, manufactures and markets biopharmaceutical products globally.

Chengzhi Company Limited manufactures and sells household chemical products, biotechnology products, pharmaceuticals, and information technology products. The Company's products include detergents, toothpastes, D-ribose, L-glutamine, Chinese traditional medicines, computer memory devices, and other related products.

Beijing Strong Biotechnologies, Inc. operates in the IVD industry, where they specialize in the manufacturing of clinical chemistry liquid reagents.

Zai Lab Limited operates as a bio-pharmaceutical company. The Company researches and develops therapeutic technology for antibody-based oncology, autoimmune, and infectious diseases treatments. Zai Lab also manufactures drugs in the form of capsules, injections, and liquids. Zai Lab serves patients worldwide.

BGI Genomics Co., Ltd offers researching and testing services. The Company provides deoxyribonucleic acid sequencing, food science, health care researching, cancer prevention, drug discovery, and DNA sequencing. BGI Genomics offers services to medical and scientific research institutions worldwide.

Shanghai Haohai Biological Technology Company Limited manufactures absorbable biomedical materials. The Company targets therapeutic areas such as orthopedics, anti-adhesion and hemostasis, ophthalmology, and wound care and tissue filling.

Shanghai Haohai Biological Technology (6826 HK)

Zhongyuan Union Cell & Gene Engineering Corp Ltd, mainly operates in the stem cell inspection and storage business and other stem cell related business.

Zhongyuan Union Cell & Gene Eng Corp (600645 CH)

Beijing SL Pharmaceutical Co., Ltd. develops, manufactures and markets genetic engineering drugs, biological drugs, chemical drugs and medicine preparations.

BioCryst Pharmaceuticals, Inc. designs, optimizes and develops small-molecule novel pharmaceuticals that block key enzymes involved in infectious diseases, inflammatory diseases & cancer.  The Company has late-stage compounds in development & continues to discover additional compounds & to progress them  to meet the unmet medical needs of patients and physicians.

Dynavax Technologies Corporation discovers, develops, and is seeking to commercialize products based on immunostimulatory sequences.  The Company is developing products to treat and prevent allergies, infectious diseases, and chronic inflammatory diseases using approaches that alter immune system responses in specific ways.

Ligand Pharmaceuticals Incorporated develops drugs which regulate hormone activated intracellular receptors.  These receptors play a role in regulating the genetic processes affecting diseases such as gynecological disorders, certain cancers, as well as cardiovascular, inflammatory, and skin diseases.

Ardelyx, Inc. develops minimally absorbed small molecule drugs. The Company offers pharmaceuticals to correct mineral metabolism imbalance and metabolic disorders by modulating the function of specific transporters, channels, and receptors located on the epithelia of the gastrointestinal tract.

Galapagos NV operates as a clinical stage biotech company. The Company develops and commercializes novel medicines and progressing pipelines in biotech with phase 2 programs, phase 1 programs, pre-clinical, and discovery programs.

Biotest AG is a provider of plasma proteins and biological drugs. The Company has specialized primarily in the areas of clinical immunology, haematology and intensive medicine with a focus on treating diseases of the immune and haematopoietic systems. Biotest AG has production operations mainly in Europe and the US, and sells its products worldwide.

Genus plc provides cattle breeding and agricultural consultancy services.  The Group, through its own domestic production and contracts with breeding companies worldwide, supplies dairy and beef semen used for artificial insemination.  They also provide laboratory services, including soil analysis and pregnancy testing, in addition to a variety of farm consultancy and advisory services.

Hugel, Inc. is a Bio-pharmaceutical company that focuses on developing beauty/cosmetics related products.  The Company's main products include botulinum toxin and fillers.

Kura Oncology, Inc. operates as a clinical stage biopharmaceutical company. The Company focuses on discovery and development of personalized therapeutics for the treatment of tumors and blood cancers. Kura Oncology offers development programs for cancers with high unmet need, including lung, colorectal, thyroid, blood, and pancreatic cancers.

Kiniksa Pharmaceuticals, Ltd. operates as a clinical-stage biopharmaceutical company. The Company focuses on discovering, acquiring, developing, and commercializing therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need. Kiniksa Pharmaceuticals serves patients worldwide.

Shanghai Henlius Biotech, Inc develops and produces drugs. The Company develops and produces monoclonal antibody biosimilar drugs, bio betters, novel monoclonal antibodys, and other drugs. Shanghai Henlius Biotech throughout China.

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Shanghai Henlius Biotech (2696 HK)

Henlius Biotech (2696 HK): Fosun Pharma's "Fair" Offer

I'd be buying Henlius up to around $23.30 or a gross/annualised spread of 5%/15%, assuming early mid-November completion.

David Blennerhassett

Henlius (2696 HK): Fosun Pharma’s HK$24.60 Offer at Around Half the IPO Price

Long-term investors will be unimpressed as the offer is half the HK$49.60 IPO price. However, shareholders with blocking stakes should be...

Arun George