Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Mainstream Group Holdings Ltd / Event-Driven

<div><p>On 9th March 2021, Australia-based third party fund administration services provider <a href="https://www.smartkarma.com/entities/mainstream-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:30611:1" rel="noopener">Mainstream Group Holdings Ltd (MAI AU)</a> announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20/share which I felt was light on a growth-adjusted basis as I discussed in <a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" data-smartkarma-citation="insights:48962" rel="noopener">Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting</a>. </p></div><div><blockquote><p><strong>THE TRADE:</strong> I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (<a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" rel="noopener">written 9th Mar 2021</a>)</p></blockquote></div><div>
<h3>Hit 1</h3>
<p>Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">Ss&amp;C Technologies (SSNC US)</a> at an Offer Price of A$2.00/share which was 66.7% higher than Vistra's original bid of A$1.20.</p>
<h3>Hit 2</h3>
<p>In my follow-up insight, <a href="https://www.smartkarma.com/insights/mainstream-mai-au-massive-overbid-by-ss-c-now-vistra-has-to-respond" target="_blank" data-smartkarma-citation="insights:50366" rel="noopener">Mainstream (MAI AU): Massive Overbid by SS&amp;C, Now Vistra Has to Respond</a>, I continuing to be Bullish on the situation as I saw this as a "low-cost Bump option". MAI shares were at A$1.975 and I wrote "I would be long at or below the current trading price". A couple of days ago, on 27th April, 2021, MAI announced that SS&amp;C has bumped the Offer to A$2.25/share valuing the company at a market cap of ~U$250mn and I discussed this in <a href="https://www.smartkarma.com/insights/mainstream-mai-au-more-competition-forces-ss-c-to-bump" target="_blank" data-smartkarma-citation="insights:50762" rel="noopener">Mainstream (MAI AU): More Competition Forces SS&amp;C to Bump</a> reiterating my Bullish stance on the situation. </p>
<h3>Hit 3</h3>
<p>Today, MAI <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02368869-2A1295153?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> that SS&amp;C has revised Terms upwards again to A$2.35/share. </p>
<div><p><em>More below the fold. </em></p></div>
<hr>
<div><div><div class="content-remarks"><p>For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a></p></div></div></div>
<div class="content-remarks"><p>  </p></div>
</div>

On 9th March 2021, Australia-based third party fund administration services provider Mainstream Group Holdings Ltd (MAI AU) announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20/share which I felt was light on a growth-adjusted basis as I discussed in Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting. THE TRADE: I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (written 9th Mar 2021)
Hit 1
Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company Ss&amp;C Technologies (SSNC US) at an Offer Price of A$2.00/share which was 66.7% higher than Vistra's original bid of A$1.20.
Hit 2
In my follow-up insight, Mainstream (MAI AU): Massive Overbid by SS&amp;C, Now Vistra Has to Respond, I continuing to be Bullish on the situation as I saw this as a "low-cost Bump option". MAI shares were at A$1.975 and I wrote "I would be long at or below the current trading price". A couple of days ago, on 27th April, 2021, MAI announced that SS&amp;C has bumped the Offer to A$2.25/share valuing the company at a market cap of ~U$250mn and I discussed this in Mainstream (MAI AU): More Competition Forces SS&amp;C to Bump reiterating my Bullish stance on the situation. 
Hit 3
Today, MAI announced that SS&amp;C has revised Terms upwards again to A$2.35/share. 
More below the fold. 

For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms
  


Mainstream (MAI AU): Three-In-A-Row! Bullseye!

<p>On 9th March 2021, Australia-based third party fund administration services provider <a href="https://www.smartkarma.com/entities/mainstream-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:30611:1" rel="noopener">Mainstream Group Holdings Ltd (MAI AU)</a> announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20/share which I felt was light on a growth-adjusted basis as I discussed in <a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" data-smartkarma-citation="insights:48962" rel="noopener">Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting</a>. </p><blockquote><p><strong>THE TRADE:</strong> I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (<a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" rel="noopener">written 9th Mar 2021</a>)</p></blockquote><p>Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">Ss&amp;C Technologies (SSNC US)</a> at an Offer Price of A$2.00/share which was 66.7% higher than Vistra's original bid of A$1.20. I covered this situation in <a href="https://www.smartkarma.com/insights/mainstream-mai-au-massive-overbid-by-ss-c-now-vistra-has-to-respond" target="_blank" data-smartkarma-citation="insights:50366" rel="noopener">Mainstream (MAI AU): Massive Overbid by SS&amp;C, Now Vistra Has to Respond</a> continuing to be Bullish on the situation as I saw this as a "<em>low-cost Bump option</em>". MAI shares were at A$1.975 and I wrote "<em>I would be long at or below the current trading price</em>".</p><p>Today, MAI announced that SS&amp;C has bumped the Offer to A$2.25/share valuing the company at a market cap of ~U$250mn. </p><div><p><em>More below the fold. </em></p></div><hr><div><div><div class="content-remarks"><p>For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a></p></div></div></div>

On 9th March 2021, Australia-based third party fund administration services provider Mainstream Group Holdings Ltd (MAI AU) announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20/share which I felt was light on a growth-adjusted basis as I discussed in Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting. THE TRADE: I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (written 9th Mar 2021)Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company Ss&amp;C Technologies (SSNC US) at an Offer Price of A$2.00/share which was 66.7% higher than Vistra's original bid of A$1.20. I covered this situation in Mainstream (MAI AU): Massive Overbid by SS&amp;C, Now Vistra Has to Respond continuing to be Bullish on the situation as I saw this as a "low-cost Bump option". MAI shares were at A$1.975 and I wrote "I would be long at or below the current trading price".Today, MAI announced that SS&amp;C has bumped the Offer to A$2.25/share valuing the company at a market cap of ~U$250mn. More below the fold. For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms

Mainstream (MAI AU): More Competition Forces SS&C to Bump

<div>
<p>Back on the 12 October,  <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration Holdings (LNK AU)</a>  <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02292481-2A1255763?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a conditional, non-binding indicative proposal from a consortium comprising Pacific Equity Partners (PEP) and the Carlyle Group, by way of a Scheme. The indicative cash price was A$5.20/share, a 30% premium to last close. Perpetual, holding 9.65% of shares out, said it would vote for a firm Offer of $5.20/share and above.</p>
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<div>
<div>After Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02297758-2A1258281?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">said</a> the proposal "<em>materially undervalued the company</em>", PEP/Carlyle <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02298663-2A1258716?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">tabled</a> a A$5.40/share non-binding indicative Offer, in cash. The proposal included an option of a cash offer for Link ex-Property Exchange Australia (PEXA) of A$3.80/share. Shareholders with <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02298654-2A1258715?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">14.62%</a> of shares out stated their intention to vote in favour of PEP/Carlyle's latest proposal. Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02300645-2A1259592?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">responded</a> that the proposal was not compelling - but gave the consortium due diligence access nonetheless.</div>
</div>
<div></div>
<div>Shortly after, software provider <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">Ss&amp;C Technologies (SSNC US)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02298663-2A1258716?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">pitched</a> a non-binding indicative proposal, by way of Scheme, at A$5.65/share, 4.6% above PEP/Carlyle's proposal. Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02320482-2A1269370?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">granted</a> SSNC due diligence, despite the Offer "not being compelling". But on the 3 January, SS&amp;C <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02327774-2A1273133?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">withdrew</a> its proposal.</div>
<div></div>
<div>Then crickets. In its 1H21 results (25 Feb), Link simply <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02346108-2A1282955?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">said</a>: "<em>PEP/Carlyle engagement remains active.</em>"</div>
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<div id="ember4300" data-smartkarma-discusison="83542">
<div data-ember-action="" data-ember-action-4301="4301">
<div>  </div>
<h3>The NEW News</h3>
<div>After months of Link saying to investors it has received various interest in its PEXA stake, indicative bids are now coming in for Link's 44% stake in the digital property settlements group.</div>
</div>
<div></div>
<div>Bids are expected to top A$1bn+ for Link's stake, or $1.86/share - vs. A$1.60/share under PEP/Carlyle's non-binding proposal.</div>
<div></div>
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<p>More below the fold.</p>
</div>


Back on the 12 October,  Link Administration Holdings (LNK AU)  announced a conditional, non-binding indicative proposal from a consortium comprising Pacific Equity Partners (PEP) and the Carlyle Group, by way of a Scheme. The indicative cash price was A$5.20/share, a 30% premium to last close. Perpetual, holding 9.65% of shares out, said it would vote for a firm Offer of $5.20/share and above.


After Link said the proposal "materially undervalued the company", PEP/Carlyle tabled a A$5.40/share non-binding indicative Offer, in cash. The proposal included an option of a cash offer for Link ex-Property Exchange Australia (PEXA) of A$3.80/share. Shareholders with 14.62% of shares out stated their intention to vote in favour of PEP/Carlyle's latest proposal. Link responded that the proposal was not compelling - but gave the consortium due diligence access nonetheless.


Shortly after, software provider Ss&amp;C Technologies (SSNC US) pitched a non-binding indicative proposal, by way of Scheme, at A$5.65/share, 4.6% above PEP/Carlyle's proposal. Link granted SSNC due diligence, despite the Offer "not being compelling". But on the 3 January, SS&amp;C withdrew its proposal.

Then crickets. In its 1H21 results (25 Feb), Link simply said: "PEP/Carlyle engagement remains active."



  
The NEW News
After months of Link saying to investors it has received various interest in its PEXA stake, indicative bids are now coming in for Link's 44% stake in the digital property settlements group.


Bids are expected to top A$1bn+ for Link's stake, or $1.86/share - vs. A$1.60/share under PEP/Carlyle's non-binding proposal.




More below the fold.


<div>
<p>On 9th March 2021, Australia-based third party fund administration services provider <a href="https://www.smartkarma.com/entities/mainstream-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:30611:1" rel="noopener">Mainstream Group Holdings Ltd (MAI AU)</a> announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20 per share. </p>
<p>I discussed this situation in <a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" data-smartkarma-citation="insights:48962" rel="noopener">Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting</a> argued that the Offer price appeared light on a growth-adjusted basis and that the bump probability was attractive. </p>
<blockquote><p><strong>THE TRADE:</strong> I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (<a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" rel="noopener">written 9th Mar 2021</a>)</p></blockquote>
<p>Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">Ss&amp;C Technologies (SSNC US)</a> at an Offer Price of A$2.00/share which translates to a 66.7% increase from Vistra's original bid of A$1.20. </p>
<div><p><em>More below the fold. </em></p></div>
<hr>
<div><div><div class="content-remarks"><p>For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a> </p></div></div></div>
</div>


On 9th March 2021, Australia-based third party fund administration services provider Mainstream Group Holdings Ltd (MAI AU) announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20 per share. 
I discussed this situation in Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting argued that the Offer price appeared light on a growth-adjusted basis and that the bump probability was attractive. 
THE TRADE: I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (written 9th Mar 2021)
Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company Ss&amp;C Technologies (SSNC US) at an Offer Price of A$2.00/share which translates to a 66.7% increase from Vistra's original bid of A$1.20. 
More below the fold. 

For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms 


Mainstream (MAI AU): Massive Overbid by SS&C, Now Vistra Has to Respond

United States

SS&C Technologies Holdings, Inc. develops and markets computer software for financial services providers.  The software enables trading and modeling, portfolio management and reporting, accounting, performance measurement, reconciliation, reporting, processing, and clearing.

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SS&C Technologies (SSNC US)

Last Week in Event SPACE: Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Mainstream (MAI AU): Three-In-A-Row! Bullseye!

Mainstream Group (MAI AU) bid is bumped again. That's three times now that SS&C has overbid. The story may not be over. Stay long.

Janaghan Jeyakumar, CFA

Mainstream (MAI AU): More Competition Forces SS&C to Bump

The first bid for Mainstream Group (MAI AU) was too low. A huge overbid resulted, followed by a third party overbid, and second bidder has over bid...

Janaghan Jeyakumar, CFA

Link Admin (LNK AU): PEXA Bidding

You have multiple competing players for PEXA, the outcome could potentially surprise to the the upside. Plus you still have PEP/Carlyle's non...

David Blennerhassett

Mainstream (MAI AU): Massive Overbid by SS&C, Now Vistra Has to Respond

Mainstream (MAI AU) got the bump that was needed. We recommended buying a few percent through terms when the deal was A$1.20. That was bumped to...

Janaghan Jeyakumar, CFA

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