Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Earlier today, <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> announced that it had entered into a Scheme Implementation Deed with a consortium of investors including IFM, AustralianSuper, QSuper and Global Infrastructure Partners.</p><p><a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> shareholders will receive A$8.75 in cash, except for UniSuper where its 15.01% shareholding will be converted into an equivalent interest in the holding structure of the consortium.</p><p>The <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> Board has unanimously recommended that shareholders vote in favour of the Schemes at the Scheme Meetings that are expected to be held in January with the scheme becoming effective at the end of that month.</p><p>The implementation of the Scheme depends on an Independent Expert concluding that the Scheme is in the best interest of <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> shareholders, ACCC approval, FIRB approval, European Union merger clearance, approval of <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> shareholders and the Supreme Court of NSW, MAC clauses and other customary conditions.</p><p>We feel the scheme is highly likely to go through and the stock will trade higher today and near the offer price as we move closer to the effective date.</p>

Earlier today, Sydney Airport (SYD AU) announced that it had entered into a Scheme Implementation Deed with a consortium of investors including IFM, AustralianSuper, QSuper and Global Infrastructure Partners.Sydney Airport (SYD AU) shareholders will receive A$8.75 in cash, except for UniSuper where its 15.01% shareholding will be converted into an equivalent interest in the holding structure of the consortium.The Sydney Airport (SYD AU) Board has unanimously recommended that shareholders vote in favour of the Schemes at the Scheme Meetings that are expected to be held in January with the scheme becoming effective at the end of that month.The implementation of the Scheme depends on an Independent Expert concluding that the Scheme is in the best interest of Sydney Airport (SYD AU) shareholders, ACCC approval, FIRB approval, European Union merger clearance, approval of Sydney Airport (SYD AU) shareholders and the Supreme Court of NSW, MAC clauses and other customary conditions.We feel the scheme is highly likely to go through and the stock will trade higher today and near the offer price as we move closer to the effective date.

Sydney Airport (SYD AU): Scheme Implementation Deed Out; Index Impact

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p>This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.</p>
</div>
<div>
<p>I number 49, mostly firm, deals around the region.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.


I number 49, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: Afterpay, Link Admin, Razer, AusNet, First Service

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/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a> is a diversified Australian energy infrastructure business with over $11 billion of electricity and gas network and connection assets. AusNet has received a binding proposal and entered a scheme implementation deed (SID) with a Brookfield-led consortium. The Brookfield offer of A$2.65 cash per share is a 33.8% premium to the unaffected price of A$1.98 (17 September), a 6.0% premium to Brookfield’s previous offer of A$2.50 per share and a 4.3% premium to the implied value of <a href="https://www.smartkarma.com/entities/apa-group" target="_blank" data-smartkarma-citation="entities:18658:1" rel="noopener">APA Group (APA AU)</a>’s offer of A$2.54 per share on 29 October (prior to the announcement of Brookfield’s binding offer). </p><p>As outlined in <a href="https://www.smartkarma.com/insights/ausnet-s-in-a-contested-takeover-battle-between-brookfield-and-apa" target="_blank" data-smartkarma-citation="insights:57906" rel="noopener">AusNet’s in a Contested Takeover Battle Between Brookfield and APA</a>, AusNet is the subject of a contested takeover battle. A day after AusNet first revealed a conditional, non-binding indicative offer from Brookfield for A$2.50 per share, APA lobbed a non-binding indicative offer comprising A$1.820 cash and 0.0878 stapled securities in Australian Pipeline Trust and APT Investment Trust per AusNet share. Following final orders made by the Takeovers Panel, AusNet was forced to grant APA due diligence on 23 October.   </p><p>In response to AusNet entering a SID with Brookfield, APA responded that it considers AusNet to be highly attractive but “<em>will remain financially disciplined.</em>” Due to the entry into a SID, APA’s due diligence access will be terminated. We also note that Singapore Power, a 32.74% shareholder, has expressed a preference for cash consideration and the break fee stands at A$101.7 million. AusNet states that APA has not indicated that it will be able to offer a full cash alternative or the value level at which any improvement to its offer could be made. Consequently, we think it is likely that APA will call it a day and walk away. </p><div class="content-highlight"><p>Brookfield’s offer is conditional on FIRB approval. We think that presence of Australia’s Sunsuper and Canadian pension funds in the consortium should help secure FIRB approval. At the last close price of A$2.56, AusNet’s shares are trading at a 3.5% premium to Brookfield’s cash offer of A$2.65.</p></div>

Ausnet Services (AST AU) is a diversified Australian energy infrastructure business with over $11 billion of electricity and gas network and connection assets. AusNet has received a binding proposal and entered a scheme implementation deed (SID) with a Brookfield-led consortium. The Brookfield offer of A$2.65 cash per share is a 33.8% premium to the unaffected price of A$1.98 (17 September), a 6.0% premium to Brookfield’s previous offer of A$2.50 per share and a 4.3% premium to the implied value of APA Group (APA AU)’s offer of A$2.54 per share on 29 October (prior to the announcement of Brookfield’s binding offer). As outlined in AusNet’s in a Contested Takeover Battle Between Brookfield and APA, AusNet is the subject of a contested takeover battle. A day after AusNet first revealed a conditional, non-binding indicative offer from Brookfield for A$2.50 per share, APA lobbed a non-binding indicative offer comprising A$1.820 cash and 0.0878 stapled securities in Australian Pipeline Trust and APT Investment Trust per AusNet share. Following final orders made by the Takeovers Panel, AusNet was forced to grant APA due diligence on 23 October.   In response to AusNet entering a SID with Brookfield, APA responded that it considers AusNet to be highly attractive but “will remain financially disciplined.” Due to the entry into a SID, APA’s due diligence access will be terminated. We also note that Singapore Power, a 32.74% shareholder, has expressed a preference for cash consideration and the break fee stands at A$101.7 million. AusNet states that APA has not indicated that it will be able to offer a full cash alternative or the value level at which any improvement to its offer could be made. Consequently, we think it is likely that APA will call it a day and walk away. Brookfield’s offer is conditional on FIRB approval. We think that presence of Australia’s Sunsuper and Canadian pension funds in the consortium should help secure FIRB approval. At the last close price of A$2.56, AusNet’s shares are trading at a 3.5% premium to Brookfield’s cash offer of A$2.65.

AusNet Enters into a Binding Agreement with Brookfield

<div>
<p>This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.</p>
</div>
<div>
<p>I number 46, mostly firm, deals around the region.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.


I number 46, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: Singapore Press, Ausnutria, Shinsei, Golden Throat, Over The Wire


For the month of October, 18 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$10bn.



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




Apollo Consolidated (AOP AU) 
Gold
0.1
Off-market Takeover
27%


Ramelius (RMS AU) Adds Apollo To Its Portfolio



Aventus Group (AVN AU) 
Real estate
0.3
Scheme
N/A


HomeCo Daily Needs REIT (HDN AU) To Merge with Aventus (AVN AU) In Self-Takeunder



Cashrewards (CRW AU) 
Online shopping
0.1
Scheme
19.5%


Cashrewards (CRW AU)'s Offer Is 34% Below Last December's IPO



Class Ltd (CL1 AU) 
Cloud accounting
0.3
Scheme
71.6%


Class - Hub24: Scheme Trading Wide



Irongate Group (IAP AU) 
Real estate
0.7
Scheme
10%


Irongate (IAP AU): 360 Capital's Tilt Reminiscent Of ARA/Cromwell Stoush



Intega Group Ltd (ITG AU) 
Construction
0.3
Scheme
95%


Intega (ITG AU) Enters Scheme With Kiwa



Over the Wire Holdings Ltd (OTW AU) 
Telco/It provider
0.3
Scheme
15%


 Over The Wire (OTW AU): The Latest Aussie IT Play



Senex Energy (SXY AU) 
Gas producer
0.6
Off-market Takeover
40%


 Senex (SXY AU): Posco's Looming Offer



Hong Kong




Ausnutria Dairy Corp (1717 HK) 
Infant formula
0.7
MGO
13.67%


Yili's Pre-Conditional Offer &amp; Ausnutria (1717 HK)'s Crowded Register



Chinese Estates Holdings (127 HK) 
Real estate
0.3
Scheme
37.9%


Chinese Estates (127 HK): $4.00/Share Offer



Cp Pokphand (43 HK) 
Agri play
0.9
Scheme
19.79%


C.P. Pokphand (43 HK): Privatisation Offer From CP Foods



Dragon Crown Group (935 HK) 
Chemical storage
0.2
Pre-con Offer
8.475


Dragon Crown (935 HK)'s VGO Is A Done Deal



Yorkey Optical International Cayman (2788 HK) 
Optics
0.1
Scheme
54.4%



Yorkey Optical (2788 HK)'s Scheme: What Will Webb Do? Yorkey Optical (2788 HK): Webb Bumps... Will Asia Optical? Yorkey Optical (2788 HK): Time To Buy




Japan




Ebook Initiative Japan Co Ltd (3658 JP) 
Digital books
0.2
Tender Offer
4.6%


E-Book Initiative (3658 JP) Tender Offer Takeout - This One Needs Cowbell Too



Pipedo HD Inc (3919 JP) 
Info platform
0.1
Tender Offer
N/A


 Pipedo HD (3919 JP): Advantage Partners MBO




Singapore




ESR-REIT (EREIT SP) /ARA LOGOS (ALLT SP)

Property
1.0
Scheme
N/A


ARA Logos (ALLT SP) To Merge with ESR-REIT (EREIT SP)



Singapore Press Holdings (SPH SP) 
Conglomerate
2.5
Scheme
10%


SPH Lobang - Holders So Shiok, Bidders So Kiasu. This May Not Be The End



Taiwan




IBF Financial (2889 TT) / Entie Commercial Bank (2849 TT) 
Finance
1.2
Share swap
N/A


20-Oct: EnTie (2849 TT) - IBF (2889 TT): US$1.2bn Cash &amp; Scrip Deal Far From Done



Source: Smartkarma Insights






The average premium for the new deals announced (or first discussed) in October was ~30%, with a year-to-date average of ~32% (139 deals &amp; total deal size of US$259bn).
This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.




Offer Premium Summary





     




2019


2020


2021 YTD



Australia
33.0%
32.4%
36.0%


Hong Kong
25.2%
34.7%
32.2%


Japan
44.0%
35.2%
27.4%


ROW
29.1%
24.2%
32.5%


Average
31.5%
31.1%
32.2%



Source: Smartkarma Insights









Summary of News in October 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)




1300 Smiles Ltd (ONT AU) 

13-Oct Scheme Booklet registered with ASIC. Scheme meeting to be held on the 12 November.




5G Networks Ltd/Australia (5GN AU) / Webcentral (WCG AU) 

1-Oct: The Federal Court of Australia has approved the convening of Scheme Meeting and distribution of Scheme Booklet. The Scheme Meeting will be held virtually at 10:00am (Melbourne time) on Monday, 8 November 2021. Indicative Timeline is shown in the image below.




Afterpay Touch (APT AU) 

No October update




Ale Property (LEP AU) 

20-Oct: Ale Property (LEP AU) is suspended "pending release of a judgement of the Supreme Court of Victoria in relation to the 2018 Rent Determinations as advised by ASX announcement on 19 October 2021". Some background on this can be found on page 12 of the 2021 annual report. According to Philip Cheetham, Head Of Listed Investor Relations at Charter Hall Long Wale Reit (CLW AU):"The outcome of this litigation does not form a defeating condition or alter our bid for LEP."




Ausnet Services (AST AU) 

15-Oct: Ausnet Services (AST AU) announces that it proposes to engage with APA Group (APA AU) on its indicative, non-binding and conditional proposal. This follows the decision and final orders announced by the Takeovers Panel in response to the application previously submitted by APA.  25-Oct: Ausnet Services (AST AU) has announced that they have granted due diligence access to APA Group (APA AU) and have been granted reverse due diligence access.  29-Oct: AusNet (AST AU): ACCC Commences Informal Review




Australian Pharmaceutical Industries (API AU) 

7-Oct: Pursuant to an undertaking agreement with Washington H. Soul Pattinson and Co. Ltd (SOL AU), Wesfarmers Ltd (WES AU) has now taken a 19.3% stake in Australian Pharmaceutical Industries (API AU).




Empired Ltd (EPD AU) 

25-Oct: Empired Ltd (EPD AU) shareholders approved the Scheme. Implementation is the 16 November.




iCar Asia Ltd (ICQ AU) 

19-Oct: ICar (ICQ AU) &amp; Carsome Enter Into Scheme




Huon Aquaculture (HUO AU) 

29-Oct: Huon Aquaculture (HUO AU) shareholders overwhelmingly supported the Scheme. The implementation date is expected to be the 17 November. 




Japara Healthcare (JHC AU) 

21-Oct: Japara Healthcare (JHC AU) shareholders approve the Scheme. The implementation date is the 5 November. 




Oil Search Ltd (OSH AU) 

29-Oct: Oil Search Ltd (OSH AU)'s first court hearing is expected to take place on the 10 November in place of 27 October as previously announced. 




Rhipe Ltd (RHP AU) 

11-Oct: Rhipe Ltd (RHP AU)'s shareholders approve the Scheme. Shares to be suspended at the close of trading on the 14 October. 




Smartgroup Corp (SIQ AU) 

25-Oct: Smartgroup Corp (SIQ AU) have announced that the TPG and Potentia consortium have decided not to proceed with the acquisition at A$10.35/share and have revised their proposal to A$9.25/share.




Spark Infrastructure (SKI AU) 

21-Oct: Spark (SKI AU): Scheme Booklet Out. Meeting On The 22 November




Sydney Airport (SYD AU) 

7-Oct: Australia's ACCC is now seeking views on the proposed acquisition of Sydney Airport (SYD AU) by the Sydney Aviation Alliance. Responses are required to be submitted by the 28 October. 










Hong Kong


Comments (with links to announcements &amp; insights)




China Youzan Limited (8083 HK) 

1-Oct: The Offeror and China Youzan (8083 HK) announced they are preparing the Scheme doc.  20 Oct: Well, not quite yet. The despatch date has been pushed o the 31 December from 19 October previously. 




Golden Throat Holdings (6896 HK) 

29-Oct: Golden Throat (6896 HK): Scheme Doc Out. Court Meeting On 30 November




Nature Home Holding Company (2083 HK) 

14-Sep: Nature Home (2083 HK): Scheme Doc Out. Court Meeting On 6 Oct. Evergrande Overhang
28-Sep: Nature Home (2083 HK): Risk Aversity Sees Spread Blow Out




Suchuang Gas Corp (1430 HK) 

29-Oct: Suchuang Gas Corp (1430 HK)'s Scheme Doc has been delayed until the 29 December. 










India


Comments 




Adani Power (ADANI IN) 

No October update




Mphasis Ltd (MPHL IN) 

No October update










Japan


Comments (with links to announcements &amp; insights)




Ebook Initiative Japan Co Ltd (3658 JP) 

No October update




Hitachi Metals (5486 JP) 

No October update




Kansai Super Market (9919 JP) 

No October update




Maxvalu Nishinihon (8287 JP) / Fuji Co Ltd (8278 JP) 

No October update




Nippo Corp (1881 JP) 

7-Oct: The Nikkei (English and Japanese) is out with an article saying that ENEOS Holdings (5020 JP) has agreed to buy JRE from GS and GIC. 




Pipedo HD Inc (3919 JP) 

No October update




Shinsei Bank (8303 JP) 

21-Oct: Shinsei Objects to SBI Tender - Offers "Requirements" To Approve 27-Oct: Shinsei TOB: A Complicated Game of 🐓 Nobody Has Thought About?










Malaysia


Comments 




Daibochi Plastic &amp; Packaging Industry (DPP MK) 
15-Oct: The independent advisor recommends the unconditional offer for Daibochi Plastic &amp; Packaging Industry (DPP MK). 25-Oct: Daibochi (DPP MK)'s Offer has been extended to the 8 November. 



Ijm Plantations (IJMP MK) 
1 Oct: Ijm Plantations (IJMP MK)'s IFA recommends Offer to shareholders.  7-Oct: Ijm Plantations (IJMP MK)'s Offer has been extended to the 25 October.   25-Oct: Ijm Plantations (IJMP MK) extends the closing date of its Offer to the 18 November.



MMC Corp Bhd (MMC MK) 
No October update











Australia

Spark Infrastructure Group invests in utility infrastructure assets in Australia.

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Spark Infrastructure (SKI AU)

Sydney Airport (SYD AU): Scheme Implementation Deed Out; Index Impact

The Scheme Implementation Deed between SYD & the consortium is out. SYD shareholders will receive A$8.75/share in cash & effective date is expected...

Brian Freitas

Asia-Pac Weekly Risk Arb Summary: Afterpay, Link Admin, Razer, AusNet, First Service

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

AusNet Enters into a Binding Agreement with Brookfield

AusNet has entered into a SID with a Brookfield-led consortium at A$2.65 cash per share. We think that the offer is attractive and it is likely a...

Arun George

Asia-Pac Weekly Risk Arb Summary: Singapore Press, Ausnutria, Shinsei, Golden Throat, Over The Wire

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

(Mostly) Asia M&A: October 2021 Roundup

The average premium for the new deals announced (or first discussed) in October was ~30%, with a year-to-date average of ~32% (138 deals & total...

David Blennerhassett

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