Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven


For the month of May, 11 new deals were discussed on Smartkarma with an overall announced deal size of ~US$7.3bn.



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




APN Property Group (APD AU) 
Property
0.2
Scheme
50%


APN Prop (APD AU): Dexus' Done Deal



Boral Ltd (BLD AU) 
Construction
4.8
Off-market
Nil


Boral Ltd (BLD AU): Seven's Nil Premium



Japara Healthcare (JHC AU) 
Healthcare
0.2
Scheme
30%


Japara Healthcare (JHC AU): Here Comes The Calvary


 



Hong Kong




Chong Hing Bank (1111 HK) 
Banking
0.2
Scheme
51.2%



Chong Hing Bank (1111 HK): Takeover Talk As Shares Pop
Chong Hing Bank (1111 HK): Yue Xiu's Offer Is Light



 



Japan




Aomori Bank (8342 JP) / Michinoku Bank (8350 JP) 
Bank
0.6
Merger



Aomori Bank &amp; Michinoku Bank Merger - Nothing To Write Home About Yet



EPS Holdings (4282 JP) 
Data/software
0.1
Tender Offer
35.5%


Another Too-Cheap MBO as Founder Takes Out EPS


 Locoguide (4497 JP) / Kufu (4399 JP)

Real estate
0.4
Merger



Locoguide (4497 JP) - Kufu (4399 JP): Merger Is a Done Deal



Maruka Machinery (7594 JP) / Furusato Industries (8087 JP) 
Trading
0.4
Merger



A Complex SmallCap Merger in Japan: Maruka (7594) And Furusato (8087)



Secom Joshinetsu (4342 JP) 
Security
0.3
Tender Offer
66.2%


Secom To Finally Buy Out Affiliate Secom Joshinetsu (4342)








Malaysia




Can-One Bhd (CAN MK) 
Manufacturing
0.1
MTO
15.8%


Can-One (CAN MK)? Yeoh Can Lah!



IHH Healthcare (IHH MK) 
Healthcare
N/A
N/A
N/A


IHH Healthcare (IHH MK): More Medicine For Mitsui?


Source: Smartkarma Insights






The above does not include BetMakers Technology Group (BET AU) lobbing a non-binding offer of A$4bn (A$1bn cash, $3bn scrip into BET) for Tabcorp Ltd (TAH AU)'s wagering and media division, and Apollo's prior tilt - Tabcorp (TAH AU): Apollo Shows Its Hand.

Nor does the table include the rumoured merger between  Angang Steel Co Ltd (H) (347 HK) and Bengang Steel (000761 CH) - Amalgamated Steel: Merging Angang &amp; Bengang As, Bs, and Hs.



The average premium for the new deals announced (or first discussed) in May was ~41%, with a year-to-date average of ~31% (78 deals). This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively. 




Summary of News in May 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)






Australia


Comments (with links to announcements &amp; insights)




3P Learning (3PL AU) 

No May update




Bingo Industries (BIN AU) 

1-May: Capital Group announced it has sold its entire 9.7% stake in Bingo Industries (BIN AU).




Crown Resorts (CWN AU) 

10-May: Crown Resorts: Blackstone &amp; Star Place Their Bets
17-May: Crown Says Blackstone's Bid Is Light. Undecided On Star
20-May: Crown Resorts Ltd: Blackstone Offer Rejected, Star Offer May Still Not Reflect True Forward Value




Galaxy Resources (GXY AU) 

No May update




Link Administration Holdings (LNK AU) 

27-May: Link Group (LNK AU): KKR Opens The Bidding For PEXA
31-May: Link Admin (LNK AU) Goes IPO Route For PEXA Afterall




Mainstream Group Holdings Ltd (MAI AU) 

2-May: Mainstream (MAI AU): More-Than-Double in Less than 2 Months After Apex Bump
6-May: Mainstream (MAI AU): Bidding War Continues as SS&amp;C Overbids for the 4th Time
14-May: Mainstream (MAI AU): +120% in ~2 Months but Bidding War Continues....




McPherson's Ltd (MCP AU) 

No May update




Mortgage Choice (MOC AU) 

26-Mau FIRB gives its approval



Primewest Group Ltd (PWG AU)

14-May: Target's Statement and Bidder's Statements were published. Primewest Group Ltd (PWG AU)'s Board has unanimously recommended shareholders to accept the Offer. 




Think Childcare (TNK AU) 

12-May: Think Childcare (TNK AU) has agreed to extend the Exclusivity Period with Busy Bees to 31st May 2021 (vs. original deadline of 14th May). This is still a non-binding deal with an expected completion date to be in 1Q CY22. 




Vitalharvest Freehold Trust (VTH AU) 

1-May: And so it goes - MAFM bumps its Offer for Vitalharvest Freehold Trust (VTH AU) to $1.26.
7-May: MAFM exercises a call option and acquires 16.2% of Vitalharvest Freehold Trust (VTH AU).
28-May Roc bumps its Offer for Vitalharvest Freehold Trust (VTH AU) to $1.29/share.  And says it will overbid any MAFM counter! 




Vocus Communications (VOC AU) 

10-May: Vocus Comms (VOC AU): MIRA/Aware's Done Deal
19-May: Vocus Comms (VOC AU): MIRA/​Aware’s Scheme Doc Despatched. EGM On 22 June










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Digital Telecom (6188 HK) 

1-May: Beijing Digital (6188 HK): Offer Now Open. IFA Says Fair
20-May: Beijing Digital Telecom (6188 HK)'s MGO is now unconditional in all respects. 




China Machinery Engineering (1829 HK) 

28-May: China Machinery Engineering (1829 HK): Movement In The Works?




China Traditional Chinese Medicine (570 HK) 

7-May: In its monthly update regarding a potential Offer, China Traditional Chinese Medicine (570 HK) says there is no update.




China Youzan Limited (8083 HK) 

10-May: China Youzan (8083 HK): Reality Check As Shares Rollover




Kerry Logistics Network (636 HK) 

4-May: Kerry Logistics Network (636 HK) will hold an EGM on the 26 May for shareholders to vote on the sale of the Hong Kong and Taiwan warehouse businesses to Kerry Holdings. 
26-May: At its SGM, Kerry Logistics Network (636 HK) shareholders overwhelmingly approved the sale of its Hong Kong, Taiwan warehouse business to Kerry Holdings.




New Century REIT (1275 HK) 

No May update




Rivera Holdings (281 HK) 

No April update




Sichuan Languang Justbon Service Group (2606 HK) 

3-May: Languang Justbon (2606 HK): Offer Now Open - For Up To Four Months










India


Comments (with links to insights)




Mphasis Ltd (MPHL IN) 

4-May: The Detailed Public Statement on Mphasis Ltd (MPHL IN) has been released. The Open Offer is scheduled tentatively to run from 18 June to 1 July, which means it is running Very Tight and the option is worth a bit less than I expected. But that just means there is more gamma. One could get big at the high Rs 1600s area. 




Vedanta Ltd (VEDL IN) 

4-May: Vedanta Now Caught Up With Peers - A Different Skew Ahead










Japan


Comments (with links to announcements &amp; insights)




BeNEXT Group (2154 JP) 
No May update



Cocokara Fine (3098 JP) 
No May update



Fuji Kosan Company (5009 JP) 
17-May:  Fuji Kosan Company (5009 JP) has responded to Aslead Strategic Value Fund's Tender Offer with its initial Target Opinion Statement which is "Opinion Withheld." This is because Fuji Kosan hasn't actually done anything yet - two weeks in. They have sent questions to Aslead, and Aslead has five business days to respond. This is slow-walking it. This tender offer is likely to be extended because of that.



Hitachi Metals (5486 JP) 

5-May: Hitachi Metals - Should I Stay or Should I Go Now?




Honshu Chemical Industry (4115 JP) 

13-May: Honshu Chemical (4115) Shareholders Perhaps One Day From a Wrong Price Takeover
16-May:: Honshu Chemical Shareholders Get the Short End of the Stick As The Board Is Ex-Gourd




Invesco Office J Reit (3298 JP) 

6-May:  Invesco Office OPPOSES Starwood Hostile Offer and Gets a Distinctly Beige Knight
11-May:  Starwood Bumps Terms, Lowers Threshold on Invesco Office
13-May:  Invesco Office's Terrible, Horrible, No Good Very Bad Day... Changes Things
20-May:  Invesco Office's Beige Knight (Deemed Dirty Gray By Markets) Suddenly Looks Brighter and Whiter
23-May:  Starwood Responds to Invesco Office's White Knight Proposal
24-May: Starwood has extended their Tender Offer on Invesco Office J Reit (3298 JP) from the 24th of May to 15th of June after the close of the 24th. They did not raise the price. This is basically the equivalent of Starwood calling Invesco's bluff. They can extend again if they want but they are going to make Invesco come out. They can change price later if they think it necessary.



Japan Asia (3751 JP)
No May update



Sawada Holdings (8699 JP) 

9-May:  Sawada Selldown Was NOT Done - Shareholder Structure Looks Different Now
23-May: Sawada Is A Different Stock Now
31-May:  Be Careful of Expectations on Sawada (8699)




Toshiba Corp (6502 JP) 

14-May: Toshiba – Shareholder Returns Trump Weak Guidance
17-May: Toshiba Results &amp; Shareholder Return - Possibly Big Impact Buyback Coming











New Zealand


Comments 




Tilt Renewables Ltd (TLT NZ) 

No May update











Singapore


Comments (with links to announcements)




Procurri Corporation (PROC SP) 

3-May: The Partial Offer has not become unconditional in all respects on the Closing Date and has therefore lapsed










Thailand


Comments




Intouch Holdings (INTUCH TB) 

No May update




Vinythai Public Co (VNT TB) 

No May update






<p>Back on the 13 December 2018, <a href="https://www.smartkarma.com/entities/can-one-bhd" target="_blank" data-smartkarma-citation="entities:10714:1" rel="noopener">Can One Bhd (CAN MK)</a> <a href="http://www.bursamalaysia.com/market/listed-companies/company-announcements/6006169" target="_blank" rel="noopener">announced</a> a proposed MGO for <a href="https://www.smartkarma.com/entities/kian-joo-can-factory-bhd" target="_blank" data-smartkarma-citation="entities:16212:1" rel="noopener">Kian Joo Can Factory (KJC MK)</a> at RM3.10/share, a 52.7% premium to last close. The Offer closed on the <a href="https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=2951016" target="_blank" rel="noopener">30 April</a> with Can-One holding 97.48%, and it moved to compulsory mop up the remaining shares.</p>
<p>Can-One has now <a href="https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3154278" target="_blank" rel="noopener">announced</a> an unconditional mandatory takeover from its director Yeoh Jin Hoe and persons acting in concert with him.</p>
<p>The Offer Price is RM2.50/share, a 15.82% <em>discount</em> to last close. </p>
<p>Not altogether surprisingly, it is not the intention of the joint offerors to delist the company, nor exercise their right to compulsory acquire shares.</p>
<p>More below the fold.</p>

Back on the 13 December 2018, Can One Bhd (CAN MK) announced a proposed MGO for Kian Joo Can Factory (KJC MK) at RM3.10/share, a 52.7% premium to last close. The Offer closed on the 30 April with Can-One holding 97.48%, and it moved to compulsory mop up the remaining shares.
Can-One has now announced an unconditional mandatory takeover from its director Yeoh Jin Hoe and persons acting in concert with him.
The Offer Price is RM2.50/share, a 15.82% discount to last close. 
Not altogether surprisingly, it is not the intention of the joint offerors to delist the company, nor exercise their right to compulsory acquire shares.
More below the fold.

<div>
<p>Back on the 17 September 2020, IR solutions provider <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> announced it had received a preliminary non-binding <a href="https://sec.report/Document/0001104659-20-105912/" target="_blank" rel="noopener">Proposal</a> from DCP Capital Partners to acquire all of its shares for US$79.05/common share, a premium of 18.82% to 51job's 30-day VWAP, and a premium of 16.05% to 51job's last close.</p>
<p>The company <a href="https://ir.51job.com/ir/php/2020/PreReleaseq09212020.php" target="_blank" rel="noopener">formed</a> a special committee on the 21 September to evaluate the proposal and an independent financial advisor was appointed on the <a href="https://ir.51job.com/ir/php/2020/PreReleaseq09302020.php" target="_blank" rel="noopener">30 September</a>.</p>
</div>
<div>
<p>Then crickets. Not even a mention in its <a href="https://ir.51job.com/ir/doc/2021/2020Form20FEDGARFINAL20210423.pdf" target="_blank" rel="noopener">2020 annual report</a> on the 23 April this year. One would have thought given the material nature of this proposal warranted at least a one-liner.</p>
<p>I reached out to the IR for clarification and was told:</p>
<blockquote>
<p>The evaluation is ongoing. When there is an update or development, a public press release will be issued.</p>
</blockquote>
<h3>The New News</h3>
<p>51job <a href="https://ir.51job.com/ir/php/2021/PreRelease20210504.php?0504" target="_blank" rel="noopener">announced</a> yesterday an updated non-binding proposal which sees Ocean Link and CEO Rick Yan joining DCP in the consortium to take the company private. The Offer price of US$79.05/common share remains the same.</p>
<p>More below the fold.</p>
</div>


Back on the 17 September 2020, IR solutions provider 51 Job Inc Adr (JOBS US) announced it had received a preliminary non-binding Proposal from DCP Capital Partners to acquire all of its shares for US$79.05/common share, a premium of 18.82% to 51job's 30-day VWAP, and a premium of 16.05% to 51job's last close.
The company formed a special committee on the 21 September to evaluate the proposal and an independent financial advisor was appointed on the 30 September.


Then crickets. Not even a mention in its 2020 annual report on the 23 April this year. One would have thought given the material nature of this proposal warranted at least a one-liner.
I reached out to the IR for clarification and was told:

The evaluation is ongoing. When there is an update or development, a public press release will be issued.

The New News
51job announced yesterday an updated non-binding proposal which sees Ocean Link and CEO Rick Yan joining DCP in the consortium to take the company private. The Offer price of US$79.05/common share remains the same.
More below the fold.


51job's Buyout: Offer Price Unchanged In Updated Proposal

<div>
<p>Some 14 months after <a href="http://chinabiologic.investorroom.com/2019-09-18-China-Biologic-Announces-Receipt-of-Preliminary-Non-Binding-Going-Private-Proposal" target="_blank" rel="noopener">announcing</a> the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a>,<span id="spanHghlt74d7"> Parfield </span>International, Hillhouse, and V-Sciences Investments for US$120/share, in cash, <a href="https://www.smartkarma.com/entities/china-biologic-products-hold" target="_blank" data-smartkarma-citation="entities:22633:1" rel="noopener">China Biologic Products (CBPO US)</a> entered into a <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115451875&amp;type=PDF&amp;symbol=CBPO&amp;companyName=China+Biologic+Products+Holdings+Inc.&amp;formType=6-K&amp;dateFiled=2020-11-19&amp;CK=1369868" target="_blank" rel="noopener">definitive merger agreement</a>, also at US$120/share, on the 19 November last year.</p>
<div>
<p>The merger was conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares being less than 8% of shares out.</p>
</div>
<div>
<p>Yesterday shareholders <a href="https://www.sec.gov/Archives/edgar/data/1369868/000110465921029688/tm218258d1_ex99-1.htm" target="_blank" rel="noopener">approved</a> the merger at an EGM. 84.5% of CBPO's outstanding shares attended in person or via proxy at the EGM, and ~92.2% voted in favour of the proposal to authorize and approve the Merger Agreement. This was no surprise - the Buyer Consortium (including PW Medtech) and the Rollover Management Members, beneficially owned ~68.84% of shares out.  </p>
<p>However, CBPO also announced that it "<em>had received notices of objection from certain shareholders that in the aggregate hold more than 8% of the total outstanding shares of the Company</em>".</p>
<p>This deal now looks set to mirror the timeline currently underway for <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a>.</p>
</div>
<div>
<p>More below the fold.</p>
</div>
</div>
<div>
<p></p>
</div>


Some 14 months after announcing the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, Pw Medtech (1358 HK), Parfield International, Hillhouse, and V-Sciences Investments for US$120/share, in cash, China Biologic Products (CBPO US) entered into a definitive merger agreement, also at US$120/share, on the 19 November last year.

The merger was conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares being less than 8% of shares out.


Yesterday shareholders approved the merger at an EGM. 84.5% of CBPO's outstanding shares attended in person or via proxy at the EGM, and ~92.2% voted in favour of the proposal to authorize and approve the Merger Agreement. This was no surprise - the Buyer Consortium (including PW Medtech) and the Rollover Management Members, beneficially owned ~68.84% of shares out.  
However, CBPO also announced that it "had received notices of objection from certain shareholders that in the aggregate hold more than 8% of the total outstanding shares of the Company".
This deal now looks set to mirror the timeline currently underway for Sina Corp (Class A) (SINA US).


More below the fold.






<p>Back on the 6 July last year, <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> <a href="http://ir.sina.com/index.php/static-files/69e95aee-2729-457f-be56-73628090b8ea" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share. This was followed by an <a href="http://ir.sina.com/static-files/de1ddd0f-354f-42de-9b33-b1bc414ab1b4" target="_blank" rel="noopener">Agreement and Plan of Merger</a> pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share.</p>
<p>Despite an undemanding Offer price, shareholders approved (93.6% of the total votes) the merger on the <a href="http://ir.sina.com/static-files/ea4a5614-30e8-472c-895c-31e120de3261" target="_blank" rel="noopener">23 December</a>.</p>
<p>Completion of the merger was contingent on the satisfaction or waiver of the closing conditions set forth in the Merger Agreement, including no more than 10% of the ordinary shares dissenting.</p>
<p>Prior to the  EGM, <a href="http://ir.sina.com/static-files/722deb54-0426-4b43-a58a-1c8be8b59b61" target="_blank" rel="noopener">21.5mn shares or 35.9%</a> of the total issued and outstanding shares of Sina issued notices of objections to the company. </p>
<p>On or prior to January 12, 2021, Sina intended to issue written notices of authorization to all the objecting shareholders. Within 20 days immediately <em>after</em> the date on which these notices were given, any objecting shareholder was required to give written notice of its decision to dissent.</p>
<p>There has been no update on the merger from Sina since the 28 December. Behind the scenes, Charles Chao can choose to walk, negotiate a superior price with dissentient shareholders, or waive the condition.  Should he waive the condition, dissentient shareholders have the right to be paid fair value for their shares, as determined by the Cayman Island's Grand Court.</p>
<p>More below the fold.<a href="https://www.collascrill.com/news-updates/articles/grand-court-confirms-that-dissent-rights-are-available-to-minority-shareholders-in-short-form-mergers/" target="_blank" rel="noopener"></a></p>

Back on the 6 July last year, Sina Corp (Class A) (SINA US) announced the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share. This was followed by an Agreement and Plan of Merger pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share.
Despite an undemanding Offer price, shareholders approved (93.6% of the total votes) the merger on the 23 December.
Completion of the merger was contingent on the satisfaction or waiver of the closing conditions set forth in the Merger Agreement, including no more than 10% of the ordinary shares dissenting.
Prior to the  EGM, 21.5mn shares or 35.9% of the total issued and outstanding shares of Sina issued notices of objections to the company. 
On or prior to January 12, 2021, Sina intended to issue written notices of authorization to all the objecting shareholders. Within 20 days immediately after the date on which these notices were given, any objecting shareholder was required to give written notice of its decision to dissent.
There has been no update on the merger from Sina since the 28 December. Behind the scenes, Charles Chao can choose to walk, negotiate a superior price with dissentient shareholders, or waive the condition.  Should he waive the condition, dissentient shareholders have the right to be paid fair value for their shares, as determined by the Cayman Island's Grand Court.
More below the fold.

China

SINA Corporation is a global Internet media company operating Chinese-language destination sites. The Company offers a network of branded content and services targeting people of Chinese descent worldwide. SINA.com offers online news, entertainment, community, and commerce through web sites that are produced and updated by local teams in China, Hong Kong, Taiwan, and North America.

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Sina Corp (Class A) (SINA US)

(Mostly) Asia M&A: May 2021 Roundup

The average premium for the new deals announced (or first discussed) in May was ~41%, with a year-to-date average of ~31% (78 deals).

David Blennerhassett

Can-One (CAN MK)? Yeoh Can Lah!

You have a near-term floor as this is an unconditional Offer. Look to enter if there is any material weakness in the share price closes near term....

David Blennerhassett

51job's Buyout: Offer Price Unchanged In Updated Proposal

Trading at a gross spread of 15.9%. With a seasoned player such as Ocean Link now in the mix, plus the CEO, a definitive agreement looks more...

David Blennerhassett

CBPO's Vote Gets Up But Dissenters Lurk

Currently trading at a gross/annualsed spread of 1.5%/7.5%. This assumes payment mid-May if assuming the negotiation process drags out to its full...

David Blennerhassett

What's Going On With Sina Corp?

Currently trading to terms. This is an avoid. The Offer is being done too cheaply, But unless you have already dissented, you are effectively...

David Blennerhassett

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