Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p><a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> will see its Tender Offer completed on Monday 30 August. I expect the result will be out as per the 30 July Circular - at 7pm HKT. </p><p>Then we wait. </p><p>And things get a little weird and possibly a little bumpy this week. </p><p>And into the week after...</p><p>But we wait anyway. </p><p>More below the fold. </p><hr><table class="table table-striped">
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<tr><td colspan="3" style="text-align: left; width: 535pt;"><h3>Insights on This WH Group Event To Date</h3></td></tr>
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<td style="text-align: center;"><strong>Date</strong></td>
<td style="text-align: center;"><strong>Author</strong></td>
<td><strong>Title</strong></td>
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<td style="text-align: center;">02-Jun-21</td>
<td style="text-align: center;"><a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" rel="noopener">David B</a></td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-288-hk-today-s-pig-is-tomorrow-s-bacon" target="_blank" data-smartkarma-citation="insights:52429" rel="noopener">WH Group (288 HK): Today's Pig Is Tomorrow's Bacon? </a></em></td>
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<td style="text-align: center;">06-Jun-21</td>
<td style="text-align: center;"><a href="https://www.smartkarma.com/profiles/travis-lundy/insights" target="_blank" rel="noopener">myself</a></td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-buyback-offer-announced-strong-accretion-creates-accretion-risk" target="_blank" data-smartkarma-citation="insights:52613" rel="noopener">WH Group Buyback Offer Announced - Strong Accretion Creates Accretion Risk </a></em></td>
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<td style="text-align: center;">20-Jun-21</td>
<td style="text-align: center;">myself</td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-vs-peers-too-many-piggies-going-to-market" target="_blank" data-smartkarma-citation="insights:53217" rel="noopener">WH Group Vs Peers - Too Many Piggies Going to Market? </a></em></td>
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<td style="text-align: center;">05-Jul-21</td>
<td style="text-align: center;">myself</td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-trading-opportunities-abound" target="_blank" data-smartkarma-citation="insights:54016" rel="noopener">WH Group - Trading Opportunities Abound </a></em></td>
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<td style="text-align: center;">10-Jul-21</td>
<td style="text-align: center;">myself</td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-long-only-fundamental-investors-can-take-advantage-too" target="_blank" data-smartkarma-citation="insights:54223" rel="noopener">WH Group - Long-Only Fundamental Investors Can Take Advantage Too </a></em></td>
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<td style="text-align: center;">30-Jul-21</td>
<td style="text-align: center;">myself</td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-offer-doc-out-this-little-piggy-went-to-market" target="_blank" data-smartkarma-citation="insights:55210" rel="noopener">WH Group Offer Doc Out - This Little Piggy Went To Market </a></em></td>
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<td style="text-align: center;">17-Aug-21</td>
<td style="text-align: center;">myself</td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-partial-buyback-offer-now-unconditional" target="_blank" data-smartkarma-citation="insights:56210" rel="noopener">WH Group Partial Buyback Offer Now Unconditional </a></em></td>
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<td style="text-align: center;">18-Aug-21</td>
<td style="text-align: center;">myself</td>
<td><em><a href="https://www.smartkarma.com/insights/wh-group-stock-plummets-as-ousted-son-drags-pigs-into-the-mud" target="_blank" data-smartkarma-citation="insights:56282" rel="noopener">WH Group - Stock Plummets as Ousted Son Drags Pigs Into The Mud </a></em></td>
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WH Group (288 HK) will see its Tender Offer completed on Monday 30 August. I expect the result will be out as per the 30 July Circular - at 7pm HKT. Then we wait. And things get a little weird and possibly a little bumpy this week. And into the week after...But we wait anyway. More below the fold. 






Insights on This WH Group Event To Date

Date
Author
Title


02-Jun-21
David B
WH Group (288 HK): Today's Pig Is Tomorrow's Bacon? 


06-Jun-21
myself
WH Group Buyback Offer Announced - Strong Accretion Creates Accretion Risk 


20-Jun-21
myself
WH Group Vs Peers - Too Many Piggies Going to Market? 


05-Jul-21
myself
WH Group - Trading Opportunities Abound 


10-Jul-21
myself
WH Group - Long-Only Fundamental Investors Can Take Advantage Too 


30-Jul-21
myself
WH Group Offer Doc Out - This Little Piggy Went To Market 


17-Aug-21
myself
WH Group Partial Buyback Offer Now Unconditional 


18-Aug-21
myself
WH Group - Stock Plummets as Ousted Son Drags Pigs Into The Mud 




WH Group Post-Tender Outlook - Index Selldown and Back-End Trading/Valuations

David Blennerhassett

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<p>After <a href="https://www.smartkarma.com/entities/oriental-watch-holdings" target="_blank" data-smartkarma-citation="entities:19950:1" rel="noopener">Oriental Watch (398 HK)</a> ("OWH") was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0831/2020083100161.pdf" target="_blank" rel="noopener">suspended</a> <em>"pursuant to the Codes on Takeovers and Mergers and Share Buy-backs</em>", the immediate takeaway was to conclude the company would be subject to a Privatization Offer. But in what is becoming increasingly more common, OWH has announced a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0914/2020091400003.pdf" target="_blank" rel="noopener">partial buyback</a> from the company - 14.55% of shares out or 83mn shares, at HK$3.00/share, a 53.85% premium to last close.</p>
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<p>This will cost the company HK$0.25bn (US$32mn). OWH had net cash on hand of ~HK$0.65bn as at Mar 2020.</p>
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<p>Yeung Ming Biu &amp; concert parties hold 30.85% of shares out and will not tender. That leaves 69.15% of the register subject to the buyback, implying a minimum pro-ration of 21.04%.</p>
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<p>Should the partial buyback complete (i.e. fully exercised) Yeung &amp; concert parties will hold 36.10% of shares out, before the exercise of any outstanding share options. That step-up in %-held oversteps Hong Kong's "creeper rule", and therefore Independent Shareholders are required, by way of a special resolution (75% vote), to approve a whitewash waiver such that Wong is not obligated to make a general offer for shares not held. </p>
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<p>As always, more below the fold. Plus<em><strong> Ye Olde Arb Grids</strong></em>.  </p>
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After Oriental Watch (398 HK) ("OWH") was suspended "pursuant to the Codes on Takeovers and Mergers and Share Buy-backs", the immediate takeaway was to conclude the company would be subject to a Privatization Offer. But in what is becoming increasingly more common, OWH has announced a partial buyback from the company - 14.55% of shares out or 83mn shares, at HK$3.00/share, a 53.85% premium to last close.


This will cost the company HK$0.25bn (US$32mn). OWH had net cash on hand of ~HK$0.65bn as at Mar 2020.


Yeung Ming Biu &amp; concert parties hold 30.85% of shares out and will not tender. That leaves 69.15% of the register subject to the buyback, implying a minimum pro-ration of 21.04%.


Should the partial buyback complete (i.e. fully exercised) Yeung &amp; concert parties will hold 36.10% of shares out, before the exercise of any outstanding share options. That step-up in %-held oversteps Hong Kong's "creeper rule", and therefore Independent Shareholders are required, by way of a special resolution (75% vote), to approve a whitewash waiver such that Wong is not obligated to make a general offer for shares not held. 


As always, more below the fold. Plus Ye Olde Arb Grids.  


Oriental Watch (398 HK): Conditional Partial Offer

<p>On the 17 June, <a href="https://www.smartkarma.com/entities/skyworth-digital-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10941:1" rel="noopener">Skyworth Digital (751 HK)</a> announced a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0617/2020061701026.pdf" target="_blank" rel="noopener">partial buyback</a> - 12.83% of shares out or 392.8mn shares, at HK$2.80/share, a 32.1% premium to last close.</p>
<p>The Offer was open to acceptances after the Circular was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0727/2020072700015.pdf" target="_blank" rel="noopener">despatched</a> on the 27 July.  The SGM (to vote on the Offer and the whitewash waiver) was initially expected to be held yesterday, but was pushed back a day on account of Typhoon Higos.</p>
<p>The votes are now in for the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0820/2020082000642.pdf" target="_blank" rel="noopener">delayed SGM</a>. The Offer was approved by 99.69% of those in attendance; and the special resolution to approve the whitewash waiver was approved by 98.56%.</p>
<p>The close of the Offer has been revised to the 3 September, from the 2 September. Cheques are expected to be despatched on or before the 14 September, from 11 September under the previous timetable. </p>
<p>As always, more below the fold. <em><strong>Plus Ye Olde Arb Grids. </strong></em></p>

On the 17 June, Skyworth Digital (751 HK) announced a partial buyback - 12.83% of shares out or 392.8mn shares, at HK$2.80/share, a 32.1% premium to last close.
The Offer was open to acceptances after the Circular was despatched on the 27 July.  The SGM (to vote on the Offer and the whitewash waiver) was initially expected to be held yesterday, but was pushed back a day on account of Typhoon Higos.
The votes are now in for the delayed SGM. The Offer was approved by 99.69% of those in attendance; and the special resolution to approve the whitewash waiver was approved by 98.56%.
The close of the Offer has been revised to the 3 September, from the 2 September. Cheques are expected to be despatched on or before the 14 September, from 11 September under the previous timetable. 
As always, more below the fold. Plus Ye Olde Arb Grids. 

Skyworth (751 HK): Partial Unconditional As Whitewash Waiver Approved

Last Week in Event SPACE: Jardines, Keppel, FamilyMart, Toshiba, Sogo/Sogou, Chinese Toll Roads

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<p>On the 17 June, <a href="https://www.smartkarma.com/entities/skyworth-digital-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10941:1" rel="noopener">Skyworth Digital (751 HK)</a> surprised the market with a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0617/2020061701026.pdf" target="_blank" rel="noopener">partial buyback</a> (&amp; not a full Offer)  - 12.83% of shares out or 392.8mn shares, at HK$2.80/share, a 32.1% premium to last close.</p>
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<p>Stephen Wong &amp; concert parties holding 40.88% of shares out and will not tender. Additional directors holding 0.9% have given an undertaking not to tender. With 58.22% of the register (or the Independent Shareholders) subject to the buyback, this implies a minimum pro-ration of 22.04%. The Independent Shareholders are required, by way of a special resolution (75% vote), to approve a whitewash waiver such that Wong is not obligated to make a general offer for shares not held. </p>
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<p>At HK$2.40, minimum pro-ration is a back end at HK$2.29 which isn't a huge discount, but with 14.9% accretion of EPS and 7.7% accretion of BVPS, the back-end should trade at perhaps 7.7-14.9% above where it was trading.</p>
<p>Separately, Skyworth <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0715/2020071500698.pdf" target="_blank" rel="noopener">announced</a> on the 15 July it had submitted a PN15 application to spin-off and list (non-wholly-owned) Shenzhen Coocaa Network Technology Company Limited (Coocaa), an internet-based operator of smart television systems.  There is no guarantee the spin-off will occur or not. Concurrent with the Coocaa announcement, Skyworth <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0715/2020071500686.pdf" target="_blank" rel="noopener">announced</a> a positive profit alert.</p>
<h2>The New News</h2>
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<p>On the 2 July, Skyworth announced it had <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0702/2020070202398.pdf" target="_blank" rel="noopener">delayed</a> the Offer Document until the 31 July, from 8 July originally. This was largely to be expected. The Offer doc is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0727/2020072700015.pdf" target="_blank" rel="noopener">out</a> and the Offer is open for acceptances. The SGM (for the whitewash waiver) will be held on the 2 September, with the close of the offer on the 2 September. The IFA considers the Offer to be fair and reasonable.</p>
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<p>As always, more below the fold. Plus <em><strong>Ye Olde Arb Grids</strong></em>. </p>
</div>


On the 17 June, Skyworth Digital (751 HK) surprised the market with a partial buyback (&amp; not a full Offer)  - 12.83% of shares out or 392.8mn shares, at HK$2.80/share, a 32.1% premium to last close.


Stephen Wong &amp; concert parties holding 40.88% of shares out and will not tender. Additional directors holding 0.9% have given an undertaking not to tender. With 58.22% of the register (or the Independent Shareholders) subject to the buyback, this implies a minimum pro-ration of 22.04%. The Independent Shareholders are required, by way of a special resolution (75% vote), to approve a whitewash waiver such that Wong is not obligated to make a general offer for shares not held. 


At HK$2.40, minimum pro-ration is a back end at HK$2.29 which isn't a huge discount, but with 14.9% accretion of EPS and 7.7% accretion of BVPS, the back-end should trade at perhaps 7.7-14.9% above where it was trading.
Separately, Skyworth announced on the 15 July it had submitted a PN15 application to spin-off and list (non-wholly-owned) Shenzhen Coocaa Network Technology Company Limited (Coocaa), an internet-based operator of smart television systems.  There is no guarantee the spin-off will occur or not. Concurrent with the Coocaa announcement, Skyworth announced a positive profit alert.
The New News




On the 2 July, Skyworth announced it had delayed the Offer Document until the 31 July, from 8 July originally. This was largely to be expected. The Offer doc is now out and the Offer is open for acceptances. The SGM (for the whitewash waiver) will be held on the 2 September, with the close of the offer on the 2 September. The IFA considers the Offer to be fair and reasonable.






As always, more below the fold. Plus Ye Olde Arb Grids. 


Skyworth (751 HK): Partial Buyback Circular Despatched

Hong Kong

SKYWORTH GROUP LIMITED is an investment holdings company with subsidiaries principally engaged in manufacture and sales of smart TV systems, home access systems, smart white appliances, intelligent manufacturing, internet value-added services, property development, property holding, photovoltaic products, modern services and trading of other products.

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Skyworth Group Limited (751 HK)

WH Group Post-Tender Outlook - Index Selldown and Back-End Trading/Valuations

WH Group Partial Buy Back Offer Closes 30 Aug. Results will be out 30 August. The returned shares will not come back until NEXT week but indices...

Travis Lundy

Oriental Watch (398 HK): Conditional Partial Offer

After Oriental Watch (398 HK) was suspended "pursuant to the Codes on Takeovers and Mergers and Share Buy-backs", the immediate takeaway as the...

David Blennerhassett

Skyworth (751 HK): Partial Unconditional As Whitewash Waiver Approved

On the 17 June, Skyworth Digital (751 HK) announced a partial buyback - 12.83% of shares out or 392.8mn shares, at HK$2.80/share, a 32.1% premium...

David Blennerhassett

Last Week in Event SPACE: Jardines, Keppel, FamilyMart, Toshiba, Sogo/Sogou, Chinese Toll Roads

Last Week in Event SPACE ... At extreme discounts to NAV for both Jardine Matheson Holdings (JM SP) & Jardine Strategic Holdings (JS SP),...

David Blennerhassett

Skyworth (751 HK): Partial Buyback Circular Despatched

On the 17 June, Skyworth Digital (751 HK) surprised the market with a partial buyback (& not a full Offer) - 12.83% of shares out or 392.8mn...

David Blennerhassett

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