Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven


For the month of June, 11 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14.8bn.



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




Altium Ltd (ALU AU) 
Software
3.7
Scheme
41.5%


Altium Ltd (ALU) Rebuffs Autodesk Offer



Hansen Technologies (HSN AU) 
Software
1.0
Scheme
25.0%


Hansen Technologies (HSN AU)'s Assured Deal With BGH



Milton Corp Ltd (MLT AU) 
Fund manager
3.1
Scheme
20.0%



WHSP's Proposed Merger With Milton Corp Milton Merger Is A Most Marvelous Arb Milton-WHSP Merger Index Implications and the Marvelous Arb



 



Hong Kong




Bestway Global Holding (3358 HK) 
Leisure products
0.1
Scheme
27.0%


Bestway Global (3358 HK): Scheme Proposal From Founder



Soho China Ltd (410 HK) 
Real estate
3.3
VGO
31.6%


SOHO China (410 HK) Suspended Pursuant To The Takeovers Code - Again SOHO China's (410 HK) Done &amp; Dusted VGO



WH Group (288 HK) 
Meat supplier
0.5
Buyback/Partial



WH Group (288 HK): Today's Pig Is Tomorrow's Bacon?  WH Group Buyback Offer Announced - Strong Accretion Creates Accretion Risk  WH Group Vs Peers - Too Many Piggies Going to Market?






Japan




Oliver Corp (7959 JP) 
Designer
0.1
Tender Offer
39.0%


Oliver (7959 JP) MBO - Please Sir, I Want Some More!



Sanshin Electronics (8150 JP) 
Electronics
1.5
Buyback Tender



Sanshin Electronics (8150 JP) BIG Buyback Tender - Not Designed For You










Malaysia




Ijm Plantations (IJMP MK) 
Palm Oil
0.7
SPA/MGO
56.19%


IJM Plantations' Potential MGO From KLK







MMC Corp Bhd (MMC MK) 
Infrastructure
0.7
SCR
70.94%


MMC Corp (MMC MK): Privatisation Offer From Syed Mokhtar  MMC Corp (MMC MK): Let's Talk About Timing










Singapore




Dutech Holdings (DTECH SP) 
Security 
0.1
Cash Offer
60.0%


Dutech Holdings (DTECH SP): A Safe Bet


Source: Smartkarma Insights






The average premium for the new deals announced (or first discussed) in June was ~41%, with a year-to-date average of ~32% (89 deals &amp; total deal size of US$161bn). 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 June 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)




APN Property Group (APD AU) 

16-Jun: APN Property (APD AU): Scheme Booklet Out. EGM Firmed




Asaleo Care Ltd (AHY AU) 

2-Jun: Asaleo (ASX: AHY): Essity’s Offer Gets Up




Bingo Industries (BIN AU) 

9-Jun: Bingo Industries (BIN AU)'s Scheme Booklet has been registered with ASIC. 
The board unanimously recommends MIRA's Offer. The Independent Expert also gives the thumbs up. The Scheme Meeting will take place on the 13 July with an expected implementation date of 5 August. 14-Jun: Bingo Industries (BIN AU): Scheme Booklet Out. EGM Tabled




Boral Ltd (BLD AU) 

4-Jun: Boral Ltd (BLD AU)'s Target Statement is expected to be released next week in response to Seven Group Holdings (SVW AU) Offer.   9-Jun: Not surprisingly, in the Target Statement,  Boral Ltd (BLD AU) has recommended shareholders reject Seven Group Holdings (SVW AU)'s Offer.  28-Jun: Boral Ltd (BLD AU) Rejects Seven's Bump




Crown Resorts (CWN AU) 

15-Jun: Crown Resorts (CWN AU): Oaktree's Intriguing Proposal




Galaxy Resources (GXY AU) 

No June update




Japara Healthcare (JHC AU) 

15-Jun: Japara Healthcare (JHC AU): Bolton Clarke Spoils Calvary's Charge




Mainstream Group Holdings Ltd (MAI AU) 

9-Jun: Mainstream (MAI AU): Apex on Top Again as Bidding War Continues.... 21-June: Mainstream Group Holdings Ltd (MAI AU) confirmed that SS&amp;C did not exercise their matching rights. Consequently, they are now in discussions with Apex. Apex's Offer was at A$2.80/share.  25-Jun: Mainstream Group Holdings Ltd (MAI AU) has confirmed that they have entered into a Scheme Implementation Deed with Apex. The Offer Price is A$2.80/share.




McPherson's Ltd (MCP AU) 

15-Jun: Arrotex walks - and McPherson's Ltd (MCP AU) tanks 15.22%




Mortgage Choice (MOC AU) 

No June update



Primewest Group Ltd (PWG AU)

3-Jun: Primewest (PWG AU): Centuria Offer Period Extended; Trading Wide 4-Jun: This Offer is now unconditional.




Think Childcare (TNK AU) 

No June update




Vitalharvest Freehold Trust (VTH AU) 

28-Jun: Vitalharvest Freehold Trust (VTH AU)'s shareholders approve MAFM's Scheme. 




Vocus Communications (VOC AU) 

22-Jun: Vocus Communications (VOC AU)'s shareholders overwhelmingly approve MIRA's Scheme.










Hong Kong


Comments (with links to announcements &amp; insights)




China Machinery Engineering (1829 HK) 

4-Jun:  CMEC (1829 HK): Clarity On Timing As Pre-Cons Fulfilled




China Traditional Chinese Medicine (570 HK) 

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




China Youzan Limited (8083 HK) 

18-Jun: China Youzan (8083 HK) has now extends the Scheme long stop date out to the 26 November 2021. 




Chong Hing Bank (1111 HK) 

8-Jun: As expected, Chong Hing Bank (1111 HK) delays the Scheme Doc to the 9 July. I had the 17 July in my indicative table  18-Jun: Chong Hing Bank (1111 HK) announced it has now pushed back the despatch of the Scheme Document to the 30 July, around two weeks past my prior estimate. 




Kerry Logistics Network (636 HK) 

7-Jun: The free float waiver has been received.  A bunch of other pre-cons still remain outstanding.  15-Jun: Shareholders of Kerry Logistics Network (636 HK) approve the partial Offer. Various pre-conditions have yet to be fulfilled.  29-Jun: CFIUS approval received. Various pre-conditions remain outstanding. 




Rivera Holdings (281 HK) 

30-Jun: Scheme Doc out. Scheme Meeting is the 23 July. Payment expected on the 30 August. 




Sichuan Languang Justbon Service Group (2606 HK) 

17-Jun: EGM gets up. Close of acceptances on the 2 July. This is done.










India


Comments (with links to insights)




Adani Power (ADANI IN) 

3-Jun: Not Much Time Left for Adani Power Delisting Offer




Mphasis Ltd (MPHL IN) 

No June update




Vedanta Ltd (VEDL IN) 

20-Jun: VEDL has continued to outperform peers while VEDL has underperformed HZL so the VEDL stub has underperformed. 










Japan


Comments (with links to announcements &amp; insights)




Aomori Bank (8342 JP) / Michinoku Bank (8350 JP) 
No June update



BeNEXT Group (2154 JP) 
No June update



EPS Holdings (4282 JP) 
1-Jun:  EPS MBO Is Cheap. Too Cheap. But Be Careful Of Your Assumptions




Fuji Kosan Company (5009 JP) 
15-Jun: Tender offer extended to the 9 July 25-Jun: Fuji Kosan Wins In Court, Aslead Walks Away




Hitachi Metals (5486 JP) 

No June update




Honshu Chemical Industry (4115 JP) 

14-Jun: The Tender Offer for Honshu Chemical Industry (4115 JP) was completed. The owners now control 84.6%.




Invesco Office J Reit (3298 JP) 

1-Jun: Starwood Bumps Invesco Office Price to Match But STILL Not a Done Deal. 11-Jun:  Invesco Real Estate Bumps Intended Tender Offer Price 16-Jun: Starwood Tender for Invesco Fails - Invesco Deal More Likely To Work But....  17-Jun: Invesco Real Estate have announced their Tender Offer for Invesco Office J Reit (3298 JP) from June 18 to July 27. JPY 22,750/share. If you own, now is the time to sell. 



Japan Asia (3751 JP)
15-Jun: CIE Boosts Its Japan Asia Group (3751) TOB Price - Hidden Implications




Locoguide (4497 JP) / Kufu (4399 JP)

No June update



Maruka Machinery (7594 JP) / Furusato Industries (8087 JP) 
No June update



Sawada Holdings (8699 JP) 

23-Jun: Sawada Holdings (8699 JP)announced that after Khan Bank applied to the Mongolian Central Bank in February for permission to pay a dividend for the year ended 31/12/2020, the MCB had responded on 18 June and so the company will receive a dividend of JPY 4.41bn and record it as operating revenue in the current fiscal year. IN ADDITION, Sawada announced that the MCB had asked for confirmation and documentation on the selldown by a Qualifying Shareholder. This was Tower. Tower sold. Tower reported they had sold. This should be open and shut.  In the meantime, J Trust Co Ltd (8508 JP) has 14.39% of Sawada. See the link.




Secom Co Ltd (9735 JP) 

1-Jun: The Tender Offer filing for Secom Co Ltd (9735 JP)'s tender offer for Secom Joshinetsu (4342 JP) was filed on 31 May.




Toshiba Corp (6502 JP) 

7-Jun: Toshiba Shareholder Return - A Little of This, A Little of That, But Sticky and Accretive 10-Jun: Toshiba's 2020 AGM Investigative Report Is Damning 11-Jun: Toshiba – Hands in the Cookie Jar 13-Jun: With Directors Under Fire, Toshiba Axes Two, May Need Another EGM 18-Jun: Toshiba – Who Should Stay and Who Should Go 22-Jun: Toshiba – A Tale of Two Investigative Reports 24-Jun: How Much of Toshiba Is Owned By "Activists"? The Answer 25-Jun: Toshiba Board in Disarray! Likely Need ANOTHER EGM 28-Jun: Toshiba – The Fallout




Yamada Denki (9831 JP) 

9-Jun: Yamada Denki and Otsuka Kagu Do The Deed - A Quick Merger









Malaysia


Comments 




Can-One Bhd (CAN MK) 
15-Jun: Offer closed on the 15 June.



IHH Healthcare (IHH MK) 
No June update











New Zealand


Comments (&amp; link to insight)




Tilt Renewables Ltd (TLT NZ) 

13-Jun: Tilt Renewables: Scheme Booklet Out. EGM Firmed










Last Week in Event SPACE: Soho China, Toshiba, China Logistics, Invesco Office, Yantian's Backlog

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.

<p><a href="https://www.smartkarma.com/entities/soho-china-ltd" target="_blank" data-smartkarma-citation="entities:4123:1" rel="noopener">Soho China Ltd (410 HK)</a> is a real estate company controlled by power couple Pan Shiyi and Zhang Xin. Today, SOHO China has announced a pre-conditional voluntary conditional cash offer from <a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a>. The offer of HK$5.00 in cash per share is a 31.6% premium over the closing price of HK$3.80 per share on the last trading day (11 June prior to the trading halt).</p><p>As a reminder on 15 June, SOHO China entered a trading halt pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which we discussed in <a href="https://www.smartkarma.com/insights/soho-china-after-many-false-starts-finally-an-offer" target="_blank" data-smartkarma-citation="insights:53114" rel="noopener">SOHO China: After Many False Starts, Finally an Offer?</a>. </p><p>The key pre-condition is approval by SAMR under the PRC anti-monopoly law, which we think should be forthcoming as this is not a privatisation bid. The offer is conditional on the offeror holding more than 50% of the voting rights. The offeror has secured irrevocables from Pan Shiyi and Zhang Xin representing 54.93% of the outstanding shares. Consequently, the offer has met the 50+% acceptance threshold. Pan Shiyi and Zhang Xin will retain shares representing 9.00% of the outstanding shares. Blackstone aims to maintain SOHO China’s listing. </p><div class="content-highlight"><p>Blackstone has driven a hard bargain and secured the irrecovables from Pan Shiyi and Zhang Xin at a relatively good price. Notably, Blackstone’s offer price of HK$5.00 per share is 17% below last year’s rumoured privatisation price of HK$6.00 per share. The lower price likely explains Blackstone’s move to pursue a conditional voluntary offer rather than privatisation via a scheme. While not a knockout offer, we think that the offer which has met the acceptance threshold, will also resonate with some shareholders. </p></div>

Soho China Ltd (410 HK) is a real estate company controlled by power couple Pan Shiyi and Zhang Xin. Today, SOHO China has announced a pre-conditional voluntary conditional cash offer from Blackstone Group (BX US). The offer of HK$5.00 in cash per share is a 31.6% premium over the closing price of HK$3.80 per share on the last trading day (11 June prior to the trading halt).As a reminder on 15 June, SOHO China entered a trading halt pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which we discussed in SOHO China: After Many False Starts, Finally an Offer?. The key pre-condition is approval by SAMR under the PRC anti-monopoly law, which we think should be forthcoming as this is not a privatisation bid. The offer is conditional on the offeror holding more than 50% of the voting rights. The offeror has secured irrevocables from Pan Shiyi and Zhang Xin representing 54.93% of the outstanding shares. Consequently, the offer has met the 50+% acceptance threshold. Pan Shiyi and Zhang Xin will retain shares representing 9.00% of the outstanding shares. Blackstone aims to maintain SOHO China’s listing. Blackstone has driven a hard bargain and secured the irrecovables from Pan Shiyi and Zhang Xin at a relatively good price. Notably, Blackstone’s offer price of HK$5.00 per share is 17% below last year’s rumoured privatisation price of HK$6.00 per share. The lower price likely explains Blackstone’s move to pursue a conditional voluntary offer rather than privatisation via a scheme. While not a knockout offer, we think that the offer which has met the acceptance threshold, will also resonate with some shareholders. 

<div>
<p>And we have a deal!</p>
<p>After a false start over a year ago, PRC commercial property-play <a href="https://www.smartkarma.com/entities/soho-china-ltd" target="_blank" data-smartkarma-citation="entities:4123:1" rel="noopener">Soho China Ltd (410 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0616/2021061600985.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from the Blackstone Group at $5.00/share, a 31.6% premium to last close and a 57.6% premium over the average close of the last five trading days.</p>
<p>The pre-cons are mainly regulatory-related - this needs clearance from SAMR under PRC Anti-Monopoly Law</p>
<p>The key condition to the Offer itself requires 50% of the voting rights tendered within the Offer period. Founders Pan Shiyi and his wife Zhang Xin have given an irrevocable to tender 54.93% of shares out, leaving the couple with 9%. It is not Blackstone's intention to delist the company nor avail itself to the power of compulsory acquisition.</p>
<p>Therefore this deal is done once SAMR signs off. The only real risk to the deal is one of timing. The fact this is not a full takeover, involves a small-ish Tier 1 property play,  and Pan Shiyi remains invested, <em>should</em> smooth over the application. My guess is the application will be assessed as a simplified procedure or simple case. </p>
</div>
<div>
<p>As always, there is more below the fold.</p>
</div>


And we have a deal!
After a false start over a year ago, PRC commercial property-play Soho China Ltd (410 HK) has announced a pre-conditional Offer from the Blackstone Group at $5.00/share, a 31.6% premium to last close and a 57.6% premium over the average close of the last five trading days.
The pre-cons are mainly regulatory-related - this needs clearance from SAMR under PRC Anti-Monopoly Law
The key condition to the Offer itself requires 50% of the voting rights tendered within the Offer period. Founders Pan Shiyi and his wife Zhang Xin have given an irrevocable to tender 54.93% of shares out, leaving the couple with 9%. It is not Blackstone's intention to delist the company nor avail itself to the power of compulsory acquisition.
Therefore this deal is done once SAMR signs off. The only real risk to the deal is one of timing. The fact this is not a full takeover, involves a small-ish Tier 1 property play,  and Pan Shiyi remains invested, should smooth over the application. My guess is the application will be assessed as a simplified procedure or simple case. 


As always, there is more below the fold.


<p><a href="https://www.smartkarma.com/entities/soho-china-ltd" target="_blank" data-smartkarma-citation="entities:4123:1" rel="noopener">Soho China Ltd (410 HK)</a> is a real estate company controlled by power couple Pan Shiyi and Zhang Xin. Today, SOHO China entered a trading halt pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers. Since 3 June, SOHO China’ shares have risen 55%. </p><p>SOHO China has been subject to bid rumours in the recent past. On 11 March 2020, SOHO China confirmed that it is in discussions with overseas financial investors to explore the possibility of a strategic partnership, which may lead to a general offer. The announcement was a reaction to a Reuters report the previous day which claimed that <a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a> was looking to privatise SOHO China at HK$6.00 per share. The controlling shareholders (Chairman Pan Shiyi and Chief Executive Zhang Xin) who have a 63.93% stake, planned to retain a small stake in the deal with Blackstone. On 13 August 2020, SOHO China announced that "<em>previous discussions with various investors have now been terminated.</em>" A potential deal with Blackstone was derailed as the COVID-19 pandemic made it difficult to assess the business outlook, according to press reports. Subsequently, on 13 November 2020, Hillhouse Capital responded to media rumours by stating it had no interest in taking SOHO China private.</p><p>As SOHO China is incorporated in the Cayman Islands, we think that a potential offer will be likely structured as a scheme of arrangement. The key conditions precedent are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection).</p><div class="content-highlight"><p>SOHO China has weathered the COVID-19 pandemic creditably which supports a potential offer. We think that Blackstone is the most likely bidder and the last year’s rumoured offer of HK$6.00 per share remains justifiable.    </p></div>

Soho China Ltd (410 HK) is a real estate company controlled by power couple Pan Shiyi and Zhang Xin. Today, SOHO China entered a trading halt pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers. Since 3 June, SOHO China’ shares have risen 55%. SOHO China has been subject to bid rumours in the recent past. On 11 March 2020, SOHO China confirmed that it is in discussions with overseas financial investors to explore the possibility of a strategic partnership, which may lead to a general offer. The announcement was a reaction to a Reuters report the previous day which claimed that Blackstone Group (BX US) was looking to privatise SOHO China at HK$6.00 per share. The controlling shareholders (Chairman Pan Shiyi and Chief Executive Zhang Xin) who have a 63.93% stake, planned to retain a small stake in the deal with Blackstone. On 13 August 2020, SOHO China announced that "previous discussions with various investors have now been terminated." A potential deal with Blackstone was derailed as the COVID-19 pandemic made it difficult to assess the business outlook, according to press reports. Subsequently, on 13 November 2020, Hillhouse Capital responded to media rumours by stating it had no interest in taking SOHO China private.As SOHO China is incorporated in the Cayman Islands, we think that a potential offer will be likely structured as a scheme of arrangement. The key conditions precedent are the headcount test and the scheme approved by at least 75% disinterested shareholders (&lt;10% disinterested shareholders rejection).SOHO China has weathered the COVID-19 pandemic creditably which supports a potential offer. We think that Blackstone is the most likely bidder and the last year’s rumoured offer of HK$6.00 per share remains justifiable.    

SOHO China: After Many False Starts, Finally an Offer?

China

Soho China Ltd. is a property developer. The Company develops properties in central Beijing and Shanghai. Soho China collaborates with internationally recognized architects, translating their designs into real estate which possesses strong appeal to property investors and the local businesses and customer bases they serve.

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Soho China (410 HK)

(Mostly) Asia M&A: June 2021 Roundup

The average premium for the new deals announced (or first discussed) in June was ~41%, with a year-to-date average of ~32% (89 deals & total dal...

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SOHO China: Blackstone Makes Its Offer

SOHO China has announced a pre-conditional voluntary conditional cash offer from Blackstone at HK$5.00 in cash per share. Due to irrevocables the...

Arun George

SOHO China's (410 HK) Done & Dusted VGO

This is a very clean deal and should trade tight to terms. I think this could trade at $4.90 at the bell tomorrow, or 2.0%/9.8% annualised. There...

David Blennerhassett

SOHO China: After Many False Starts, Finally an Offer?

SOHO China entered a trading halt pursuant to the HK Code on Takeovers & Mergers. We think that Blackstone is the most likely bidder and the last...

Arun George

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