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.

Event-Driven

Sichuan Languang Justbon Service Group / Event-Driven

<p><a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> has entered into agreements with three vendors to purchase a combined 71.17% of outstanding shares in <a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-service-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Sichuan Languang Justbon Service Group (2606 HK)</a> for RMB42.8546 (equivalent to HK$51.0569).</p><p>As a reminder on 25 February 2021, Languang Justbon announced that Languang Hejun, the controlling shareholder, entered a memorandum of understanding (MOU) with Country Garden Services to sell 115.1 million H shares (64.62% of the outstanding shares) at a price of RMB42.1105 per H share. On 11 March, the MOU was updated such that Languang Hejun will sell Country Garden Services 0.75 million domestic shares (0.42% of the outstanding shares) in addition to the previously agreed 115.1 million H shares (64.62% of the outstanding shares). The acquisition price was modestly bumped 1.8% from RMB42.1105 per H share to RMB42.8546 per H share or per domestic share. </p><p>On completion of the agreements, Country Garden Services will be required to make an unconditional mandatory cash offer under Rule 26.1 of the Takeovers Code. The unconditional mandatory cash offer (base offer) for all the issued shares is HK$51.0571 per H-share (RMB42.8547 per domestic share). Notably, Country Garden Services proposes to delist Languang Justbon by offering an enhanced cash offer of HK$54.3000 per H-share (RMB45.5768 per domestic share). The enhanced share offer, which is payable only if the delisting is approved, is a 3.6% premium to the last close of HK$52.40 and a 39.41% premium to the unaffected price of HK$38.95 (22 February 2021 prior to the first trading halt). </p><div class="content-highlight"><p>The two key conditions for the delisting will be approval by at least 75% independent H-shareholders (&lt;10% of all independent H-shareholders rejection) and the satisfaction of the minimum acceptance condition (90% of H-shares held by independent H-shareholders). Independent H-shareholders shareholders represent 51.0 million shares which are 28.62% of outstanding shares. Consequently, the 10% blocking stake is 5.1 million shares which is 2.86% of the outstanding shares. Overall, as we think that the enhanced offer price is reasonable, the delisting proposal will likely succeed. </p></div>

Country Garden Services Holdings (6098 HK) has entered into agreements with three vendors to purchase a combined 71.17% of outstanding shares in Sichuan Languang Justbon Service Group (2606 HK) for RMB42.8546 (equivalent to HK$51.0569).As a reminder on 25 February 2021, Languang Justbon announced that Languang Hejun, the controlling shareholder, entered a memorandum of understanding (MOU) with Country Garden Services to sell 115.1 million H shares (64.62% of the outstanding shares) at a price of RMB42.1105 per H share. On 11 March, the MOU was updated such that Languang Hejun will sell Country Garden Services 0.75 million domestic shares (0.42% of the outstanding shares) in addition to the previously agreed 115.1 million H shares (64.62% of the outstanding shares). The acquisition price was modestly bumped 1.8% from RMB42.1105 per H share to RMB42.8546 per H share or per domestic share. On completion of the agreements, Country Garden Services will be required to make an unconditional mandatory cash offer under Rule 26.1 of the Takeovers Code. The unconditional mandatory cash offer (base offer) for all the issued shares is HK$51.0571 per H-share (RMB42.8547 per domestic share). Notably, Country Garden Services proposes to delist Languang Justbon by offering an enhanced cash offer of HK$54.3000 per H-share (RMB45.5768 per domestic share). The enhanced share offer, which is payable only if the delisting is approved, is a 3.6% premium to the last close of HK$52.40 and a 39.41% premium to the unaffected price of HK$38.95 (22 February 2021 prior to the first trading halt). The two key conditions for the delisting will be approval by at least 75% independent H-shareholders (&lt;10% of all independent H-shareholders rejection) and the satisfaction of the minimum acceptance condition (90% of H-shares held by independent H-shareholders). Independent H-shareholders shareholders represent 51.0 million shares which are 28.62% of outstanding shares. Consequently, the 10% blocking stake is 5.1 million shares which is 2.86% of the outstanding shares. Overall, as we think that the enhanced offer price is reasonable, the delisting proposal will likely succeed. 

Languang Justbon’s Mandatory Offer and Voluntary Delisting Proposal from Country Garden Services

<p><a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-service-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Sichuan Languang Justbon Service Group (2606 HK)</a> provided an update pursuant to Rule 3.7 of the Hong Kong Code on Takeovers and Mergers. As a reminder on 25 February 2021, Languang Justbon announced that Languang Hejun, the controlling shareholder, entered a memorandum of understanding (MOU) with <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> to sell 115.1 million H shares (64.62% of the outstanding shares) at a price of RMB42.1105 per H share. </p><p>The MOU has been updated such that Languang Hejun will sell Country Garden Services also 0.75 million domestic shares (0.42% of the outstanding shares) in addition to the previously agreed 115.1 million H shares (64.62% of the outstanding shares). The total represents Languang Hejun entire shareholding of 115.8 million shares, which represents 65.04% of the outstanding shares. Also, the acquisition price has been modestly bumped 1.8% from RMB42.1105 per H share to RMB42.8546 per H share or per domestic share. </p><p>Country Garden Services will also pay a deposit of RMB1,985.67 million to Languang Hejun and Languang Hejun shall execute a share charge over 106.9 million H shares (60.00% of the outstanding shares) in favour of Country Garden Services.</p><p>If the potential transaction materialises it may lead to a general offer at the higher of (i) the price paid to Languang Hejun, and (ii) the HK$ equivalent of RMB42.8546 (HK$51.30 per share at an FX rate of 0.8353). </p><div class="content-highlight"><p>We think that this latest development takes the transaction one step closer to completion. At the last close price of HK$47.55, the gross spread to the possible general offer price of HK$51.30 per share is 7.9%. The downside risk to a failed agreement remains low as Languang Justbon is trading close to its break price, in our view. The forward P/E of 9.7x implied by the last close price is 11% above the 6-month forward P/E multiple of 8.7x but 9% below the 1-year average forward P/E of 10.7x (calculated up to 22 February prior to the trading halt). </p></div>

Sichuan Languang Justbon Service Group (2606 HK) provided an update pursuant to Rule 3.7 of the Hong Kong Code on Takeovers and Mergers. As a reminder on 25 February 2021, Languang Justbon announced that Languang Hejun, the controlling shareholder, entered a memorandum of understanding (MOU) with Country Garden Services Holdings (6098 HK) to sell 115.1 million H shares (64.62% of the outstanding shares) at a price of RMB42.1105 per H share. The MOU has been updated such that Languang Hejun will sell Country Garden Services also 0.75 million domestic shares (0.42% of the outstanding shares) in addition to the previously agreed 115.1 million H shares (64.62% of the outstanding shares). The total represents Languang Hejun entire shareholding of 115.8 million shares, which represents 65.04% of the outstanding shares. Also, the acquisition price has been modestly bumped 1.8% from RMB42.1105 per H share to RMB42.8546 per H share or per domestic share. Country Garden Services will also pay a deposit of RMB1,985.67 million to Languang Hejun and Languang Hejun shall execute a share charge over 106.9 million H shares (60.00% of the outstanding shares) in favour of Country Garden Services.If the potential transaction materialises it may lead to a general offer at the higher of (i) the price paid to Languang Hejun, and (ii) the HK$ equivalent of RMB42.8546 (HK$51.30 per share at an FX rate of 0.8353). We think that this latest development takes the transaction one step closer to completion. At the last close price of HK$47.55, the gross spread to the possible general offer price of HK$51.30 per share is 7.9%. The downside risk to a failed agreement remains low as Languang Justbon is trading close to its break price, in our view. The forward P/E of 9.7x implied by the last close price is 11% above the 6-month forward P/E multiple of 8.7x but 9% below the 1-year average forward P/E of 10.7x (calculated up to 22 February prior to the trading halt). 

Languang Justbon’s General Offer from Country Garden Services - A Step Closer

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors


For the month of February, 20 new deals were discussed on Smartkarma with an overall announced deal size of ~US$31bn.


Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow-up discussions, or simply click on the insight link(s) below the name.






New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Vocus Communications (VOC AU) 
Telcos
2.6
Scheme
25.6%


Vocus Back In Focus As MIRA Takes A Turn








Hong Kong




Beijing Digital Telecom (6188 HK) 
Mobile devices
0.2
Possible MGO
7.0%


Beijing Digital (6188 HK): Possible Offer From Zhuhai SASAC



Kerry Logistics Network (636 HK) 
Logistics
2.2
Partial
11.22%


Kerry Logistics (636 HK): SF Holdings' Pre-Conditional Partial Offer



Sichuan Languang Justbon (2606 HK) 
Property services
0.7
MOU/Poss Offer
30%


Languang Justbon (2606 HK): Potential General Offer From Country Gardens






India








National Aluminium (NACL IN) 
Aluminium
0.1
Buyback Tender
30%


NALCO India Buyback Tender Offer: A Small Arb








Japan




Being Co Ltd (4734 JP) 
Software
0.1
Tender Offer
34.7%


MBO for Being Co (4734 JP): Tender Offer Is a Done Deal



Dynac Holdings Corporation (2675 JP) 
Restaurants
0.1
Tender Offer
11.5%


Dynac Corp (2675 JP) Tender Offer: Looks like a Done Deal



Japan Asia (3751 JP) 
Infrastructure
0.3
Tender Offer
1%


Japan Asia Group MBO Fails, Now JAG Against Murakami's Higher Bid 



Maeda Corp (1824 JP) &amp; Maeda Road Construction Co (1883 JP) &amp; Maeda Seisakusho (6281 JP) 
Construction
4.0
Merger
14% for Maeda Road


Maeda Corp/Road/Seisakusho - 3-Way Merger 1 Year After Hostile Takeover 



N Field Co Ltd (6077 JP) 
Nursing care
0.2
Tender Offer
42.2%


N Field (6077) Take-Private by Unison Capital - Fast Growth Long Runway Asset Going Not So Rich



Sakai Ovex (3408 JP) 
Textiles
0.2
Tender Offer
31.7%


Sakai Ovex MBO - Wrong Price (And the Bidder Knows It)



Sanken Electric (6707 JP) 
Semis
0.2
Partial Tender
17.1%


Effissimo Launches Unsolicited/Hostile Partial Tender On Sanken Electric



Tsukui Corp (2398 JP) 
Nursing care
0.5
Tender Offer
51.7%


Tsukui Holdings (2398) - Another CHEAP Japan Nursing Care Take-Private Deal



Unimat Retirement Community (9707 JP) 

Nursing care
0.1
Tender Offer
28.4%


MBO for Unimat (9707 JP): Deserves a Bump!


 



Europe








Aggreko PLC (AGK LN) 
Energy
3.2
Offer
39%


Aggreko: £2bn Potential Bid from PE Consortium



Arrow Global (ARW LN) 
Debt purchaser
0.8
Offer
36.2%


Arrow Global - TDR Capital: Preliminary Conditional Proposal



ASTM SpA (AT IM) 
Infrastructure
4.0
Offer
28.8%


ASTM SpA - Nuova Argo Finanziaria Takeout Offer, Trading Tight



Dialog Semiconductor (DLG GR) 
Semi
6.0
Offer
20.3%


Dialog Semiconductor - Renesas Electronics Recommended Cash Offer



Signature Aviation (SIG LN) 
Aviation services
4.7
Scheme
53%


Signature Aviation - PE Consortium Agreed Offer








US




Hollysys Automation Technolo (HOLI US) 
Automation
1.0
Offer
36.7%


Hollysys (HOLI US): Machine Earning


Source: Smartkarma Insights





The above does not include the possible deal for Brilliance China Automotive (1114 HK) (Brilliance China (1114 HK): Grilling Kidneys). 

The average premium for the new deals announced (or first discussed) in February was ~27.5%, with a year-to-date average of ~31%. This compares to the average premium for all deals in 2020 and 2019 of 31% and 31.5% respectively. 




Summary of News in February of Arb Situations On Smartkarma's Radar



(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation. Where a new insight was written on these names in July, I've included a link, in bold, to that insight in italics.)






Australia


Comments (with links to announcements &amp; insights)




3P Learning (3PL AU) 

22-Feb: 1H21 results




amaysim Australia (AYS AU) 

1-Feb: WAM Capital Ltd (WAM AU) Offer for amaysim Australia (AYS AU) is free of all defeating conditions. Here is the Bidder's Statement. Offer closes on the 30 March - unless extended. 




Asaleo Care Ltd (AHY AU) 

18-Feb: Asaleo (ASX: AHY): Essity's Revised Offer




Bingo Industries (BIN AU) 

22-Feb: 1H21 results




Coca Cola Amatil (CCL AU) 

16-Feb: Coca Cola Amatil: CCEP's Best &amp; Final Offer
17-Feb: Coca-Cola Amatil Takeover Offer Raised 5.9%, Seems Like a Done Deal




Think Childcare (TNK AU) 

20-Jan: Think Childcare (TNK AU): Bigger Bid by Busy Bees




Vitalharvest Freehold Trust (VTH AU) 

26-Feb: Non-binding Offer from ROC of A$1.08/share by way of a Scheme.




WPP AUNZ (WPP AU) 

25-Feb: FY20 results










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Jingneng Clean Energy (579 HK) 

22-Feb: Beijing Jingneng (579 HK): Low Voter Turn-Out Sees Spread Widening




Car Inc (699 HK) 

18-Feb: Car Inc (699 HK)'s Offer unconditional in all respects. Offeror (MBK) holds 52.11%. Offer closes on the 4 March.




China Logistics Property Holdings (1589 HK) 

No February update




China Machinery Engineering (1829 HK) 

3-Feb: Despatch of Composite Doc pushed out to 20 Jan 2022.




HKC Holdings (190 HK) 

5-Feb: Despatch of Scheme Doc pushed out to 30 April this year.




Huifu Payment Limited (1806 HK) 

19-Feb: Shareholders approved the Scheme at Huifu Payment Limited (1806 HK)'s Scheme Meeting. Cheques to be despatched on or before 8 April.




I.T Ltd (999 HK) 

19-Feb: Court to convene a meeting on the 4 March.




New Century REIT (1275 HK) 

17-Feb: Circular for New Century REIT (1275 HK) has been delayed until the 19 March - on or before. 




Polytec Asset Holdings (208 HK) 

11-Feb: As expected, Polytec Asset Holdings (208 HK) has extended the despatch of the Scheme Doc to 16 April.




Rivera Holdings (281 HK) 

5-Feb: Rivera Holdings (281 HK) Scheme Doc pushed way out to 7 June as the High Court has directed that the hearing of the originating summons for an order to issue its directions for convening the Court Meeting will only be held on 28 May 2021




SHK Hong Kong Industries (666 HK) 

11-Feb: SHK (666 HK): Scheme Doc Out, IFA Says Fair




China Traditional Chinese Medicine (570 HK) 

No February update




Zhejiang New Century Hotel Management Group (1158 HK) 

5-Feb: The pre-conditions for Zhejiang New Century Hotel Management Group (1158 HK) have been satisfied. Composite Doc to be despatched on ore before the 31 March, about a week earlier than my prior estimate. 




Zhuhai Holdings Investment (908 HK) 

11-Feb: As expected, the despatch of the Scheme Doc for Zhuhai Holdings Investment (908 HK) has been pushed back to the 21 April.










India


Comments (with links to insights)




Allcargo Logistics (AGLL IN) 

No February update




Engineers India (ENGR IN) 

No February update




INEOS Styrolution India Limited (INEOS IN) 

No February update




Vedanta Ltd (VEDL IN) 

19-Feb: Vedanta Soars Beyond Indicative Open Offer Level. Not Expensive










Japan


Comments (with links to announcements &amp; insights)




Cocokara Fine (3098 JP) 
2-Feb: Cocokara/​MatsuKiyo Deal Finally Coming?




Honshu Chemical Industry (4115 JP) 

14-Feb: Honshu Chemical - What WAS the Wrong Price Gets Wronger




Japan Asia (3751 JP) 

4-Feb: Overbid: JAG Special Committee Plays Stupid so Murakami Plays Hardball
20-Feb: Japan Asia Group MBO Fails, Now JAG Against Murakami's Higher Bid




Joban Kaihatsu (1782 JP) 

Tender Offer was successful.




Toa Oil Co Ltd (5008 JP) 

12-Feb: Toa Oil (5008) Tender - Has the Dog Caught the Car?
17-Feb: Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores 25 Feb: Toa Oil (5008) - Idemitsu Looking To The Next Attempt?




Tokyo Rope Mfg (5981 JP) 

3-Feb: Nippon Steel Corporation (5401 JP) replied to questions posed to it by Tokyo Rope Mfg (5981 JP) in the latter's Opinion Statement regarding NSC's tender offer.  It is quite clear, and quite non-combative, relatively speaking. 











Malaysia


Comments (with links to announcements)




Batu Kawan Bhd (BAK MK) 

5-Feb: Compulsory acquisition notice sent out




FGV Holdings Bhd (FGV MK) 

16-Feb: Offer extended until the 2 March 25-Feb: Offer extended until the 15 March












New Zealand


Comments (with links announcements)




Infratil Ltd (IFT NZ) 

4-Feb: Lots of interest in Tilt Renewables Ltd (TLT NZ) 












Philippines


Comments (with links announcements)




Lopez Holdings (LPZ PM) 

17-Feb:  There's been an amendment to the partial offer for Lopez Holdings (LPZ PM). The maximum to be acquired will now be 1.43bn shares or 31.5%.   
"the reduction is intended to address concerns and the risk that LPZ may still fall below the public ownership requirement despite the initial reduced maximum number of shares to be acquired."  The Tender Offer price remains at P3.85 per share. The Tender Offer period will be extended from February 19, 2021, to March 8, 2021.











Singapore


Comments (with links to announcements &amp; insights)




CEI Limited (CEI SP) 

15-Feb: Pre-cons met. Offer doc to be sent 14-21 from this date.
15-Feb: AEM's Privatization Deal for CEI Limited (CEI SP): Pre-Condition Satisfied




GL Ltd (GLL SP) 

4-Feb: Offer Doc for GL Ltd (GLL SP) is out. The Circular, which will include an IFA opinion, is expected to be despatched on or before the 18 Feb. 
18-Feb: The Circular is out for GL Ltd (GLL SP). The IFA says the Offer is not fair but reasonable.




Penguin International (PBS SP) 

24-Feb: Penguin International (PBS SP)'s Circular is out - independent directors and IFA recommend shareholders accept Emet Grace offer.




Soilbuild Business Space REIT (SBREIT SP) 

18-Feb: Soilbuild REIT: Scheme Doc Out. EGM Convened










Taiwan


Comments (with links to announcements &amp; insights)




Jih Sun Financial (5820 TT) 

24-Feb: The Taiwan Fair Trade Commission has "approved" the takeover of Jih Sun Financial (5820 TT) by Fubon Financial Holding Co (2881 TT). This is a little earlier than expected. Fubon Financial Deal for Jih Sun Gets TFTC Signoff





















North America


Comments (with links to announcements and insights)





51 Job Inc Adr (JOBS US) 

No February update




China Biologic Products (CBPO US) 

China Biologic calls EGM on 1 March to consider proposed take-private



HUYA Inc (HUYA US)
No February update



PNM Resources (PNM US) 
12-Feb: PNM Resources shareholders supported the integration with Avangrid, Iberdrola's US subsidiary. The approval represents another milestone in the integration process between the New Mexico and Texas power company and the Iberdrola group company.
The operation, which already has the approval of the Committee on Foreign Investments in the United States (CFIUS) and Hart Scott Rodino Clearance (HSR), expects to obtain all the necessary approvals at both the state and federal levels throughout 2021.




Sina Corp (Class A) (SINA US) 

22-Feb: What's Going On With Sina Corp?




Sogou Inc (SOGO US) 
4-Feb: FY20 results




Wanda Sports Group (WSG US) 
1-Feb: Offer to expire on the 26 Feb.






































<div>
<p>After property management service provider <a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Languang Justbon Services (2606 HK)</a> was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0223/2021022300073.pdf" target="_blank" rel="noopener">suspended</a> "<em>pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers</em>", Justbon has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0225/2021022500961.pdf" target="_blank" rel="noopener">announced</a> its major shareholder has entered into a MOU with <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> (CGS) to sell a 64.62% stake.</p>
<p>The seller is Languang Hejun, a wholly-owned entity of <a href="https://www.smartkarma.com/entities/sichuan-languang-development-co-ltd" target="_blank" data-smartkarma-citation="entities:7403:1" rel="noopener">Sichuan Languang Development (600466 CH)</a>.</p>
<p>Terms under the MOU are RMB42.1105/share. No HK$-equivalent figure was quoted, but at today's exchange rate. this is roughly equivalent to HK$50.61/share, or a ~30% premium to last close.</p>
<p>The announcement is light on detail as to the MOU, although it does provide exclusivity for CGS, such that <em>"Languang Hejun is required to seek the Potential Purchaser’s consent before providing information or making an offer or invitation to or conducting any discussion with any third party, regarding the transfer of securities by or security transactions of the H shares or domestic shares held by Languang Hejun."</em></p>
</div>
<div>More below the fold.</div>


After property management service provider Languang Justbon Services (2606 HK) was suspended "pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers", Justbon has now announced its major shareholder has entered into a MOU with Country Garden Services Holdings (6098 HK) (CGS) to sell a 64.62% stake.
The seller is Languang Hejun, a wholly-owned entity of Sichuan Languang Development (600466 CH).
Terms under the MOU are RMB42.1105/share. No HK$-equivalent figure was quoted, but at today's exchange rate. this is roughly equivalent to HK$50.61/share, or a ~30% premium to last close.
The announcement is light on detail as to the MOU, although it does provide exclusivity for CGS, such that "Languang Hejun is required to seek the Potential Purchaser’s consent before providing information or making an offer or invitation to or conducting any discussion with any third party, regarding the transfer of securities by or security transactions of the H shares or domestic shares held by Languang Hejun."

More below the fold.

Languang Justbon (2606 HK): Potential General Offer From Country Gardens

<p>On Thursday after market close, <a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-service-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Sichuan Languang Justbon Service Group (2606 HK)</a> announced that Languang Hejun, the controlling shareholder, entered a memorandum of understanding (MOU) with <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> to sell 115.1 million H shares (64.62% of the outstanding shares) at a price of RMB42.1105 per H share. If the potential transaction materialises it may lead to a general offer at the higher of (i) the price paid to Languang Hejun, and (ii) the HK$ equivalent of RMB42.1105 (HK$50.62 per share at an FX rate of 0.8319).</p><p>The possible general offer price of HK$50.62 per share is a 30.0% premium to the unaffected price of HK$38.95 per share (22 February prior to the trading halt) and a 36.8% premium to the IPO price of HK$37 per H Share (listed on 18 October 2019). </p><div class="content-highlight"><p>We believe that the transaction will proceed as Country Garden Services is acquiring Languang Justbon at an attractive multiple and <a href="https://www.smartkarma.com/entities/sichuan-languang-development-co-ltd" target="_blank" data-smartkarma-citation="entities:7403:1" rel="noopener">Sichuan Languang Development (600466 CH)</a> (through Languang Hejun) is cashing out at a healthy premium to the IPO price and last close price. Overall, we think that at the last close price, the downside risk is low (trading close to break price) with a good probability of upside (announcement of a general offer).  </p></div>

On Thursday after market close, Sichuan Languang Justbon Service Group (2606 HK) announced that Languang Hejun, the controlling shareholder, entered a memorandum of understanding (MOU) with Country Garden Services Holdings (6098 HK) to sell 115.1 million H shares (64.62% of the outstanding shares) at a price of RMB42.1105 per H share. If the potential transaction materialises it may lead to a general offer at the higher of (i) the price paid to Languang Hejun, and (ii) the HK$ equivalent of RMB42.1105 (HK$50.62 per share at an FX rate of 0.8319).The possible general offer price of HK$50.62 per share is a 30.0% premium to the unaffected price of HK$38.95 per share (22 February prior to the trading halt) and a 36.8% premium to the IPO price of HK$37 per H Share (listed on 18 October 2019). We believe that the transaction will proceed as Country Garden Services is acquiring Languang Justbon at an attractive multiple and Sichuan Languang Development (600466 CH) (through Languang Hejun) is cashing out at a healthy premium to the IPO price and last close price. Overall, we think that at the last close price, the downside risk is low (trading close to break price) with a good probability of upside (announcement of a general offer).  

Languang Justbon Possible General Offer from Country Garden Services

China

Sichuan Languang Justbon Services Group Co., Ltd. offers property management services. The Company provides services for residential properties, commercial properties, office properties, urban complexes, headquarters bases, and tourism real estate projects. Sichuan Languang Justbon Services Group provides services worldwide.

Sichuan Languang Justbon Service Group (2606 HK)

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

Sichuan Languang Justbon Service Group (2606 HK)

Languang Justbon’s Mandatory Offer and Voluntary Delisting Proposal from Country Garden Services

CGS has announced a voluntary delisting proposal at HK$54.3000 per H-share subject to shareholder approval and min acceptance conditions. We think...

Arun George

Languang Justbon’s General Offer from Country Garden Services - A Step Closer

The MOU has been updated such that Languang Hejun will sell CG Services its entire shareholding of 115.8 m shares at slightly improved terms...

Arun George

(Mostly) Asia M&A: February 2021 Roundup

The average premium for the new deals announced in February was ~27.5%, with a year-to-date average of ~31%. This compares to the average premium...

David Blennerhassett

Languang Justbon (2606 HK): Potential General Offer From Country Gardens

This is, as yet, a non-binding deal. But it is not a lot of money for CGS. Assuming a firm Offer unfolds and five-months to complete, I'd be paying...

David Blennerhassett

Languang Justbon Possible General Offer from Country Garden Services

The controlling shareholder entered an MOU with CG Services to sell a 64.62% stake at RMB42.1105 per H share. The downside is low (close to break...

Arun George

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