Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>Back on the 30 April, aged-care Aussie listed operator <a href="https://www.smartkarma.com/entities/japara-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:14760:1" rel="noopener">Japara Healthcare (JHC AU)</a> made an <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02369261-3A566260?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announcement</a> it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.</p>
<p>On the 5 June, Calvary <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382224-3A568448?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> the indicative Offer price to A$1.20/share.  JHC's board concluded it was appropriate to Offer Calvary due diligence access.</p>
<p>Now the Bolton Clarke Group has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02384417-3A568803?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">made</a> a conditional, non-binding indicative proposal by way of a Scheme, at A$1.22/share. The Offer is subject to due diligence, financing, unanimous support from JHC's directors, and final approval from the Bolton Clarke board. </p>
<p>Due diligence access, consistent with that afforded to Calvary, has been provided.</p>
<p>Shares jumped 8% on the news and closed at A$1.275/share.</p>
<div>More below the fold.</div>
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Back on the 30 April, aged-care Aussie listed operator Japara Healthcare (JHC AU) made an announcement it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.
On the 5 June, Calvary bumped the indicative Offer price to A$1.20/share.  JHC's board concluded it was appropriate to Offer Calvary due diligence access.
Now the Bolton Clarke Group has made a conditional, non-binding indicative proposal by way of a Scheme, at A$1.22/share. The Offer is subject to due diligence, financing, unanimous support from JHC's directors, and final approval from the Bolton Clarke board. 
Due diligence access, consistent with that afforded to Calvary, has been provided.
Shares jumped 8% on the news and closed at A$1.275/share.
More below the fold.





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

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

<p>An Australian Royal Commission on aged care providers was <a href="https://agedcare.royalcommission.gov.au/sites/default/files/2021-03/final-report-volume-1_0.pdf" target="_blank" rel="noopener">issued</a> on the 26 February 2021 with 148 recommendations to address what was deemed a weak and ineffective regulatory arrangement, including a new aged care act, the introduction of a system of star rating system for facilities, and some form of aged care levy for the funding of the system. The government also made an initial pledged of $452mn in additional funding.</p>
<p>The share price reaction to the report from the three key aged-care Aussie listed operators - <a href="https://www.smartkarma.com/entities/regis-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:2086:1" rel="noopener">Regis Healthcare (REG AU)</a>, <a href="https://www.smartkarma.com/entities/estia-health-ltd" target="_blank" data-smartkarma-citation="entities:77:1" rel="noopener">Estia Health (EHE AU)</a>, and <a href="https://www.smartkarma.com/entities/japara-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:14760:1" rel="noopener">Japara Healthcare (JHC AU)</a> - was largely one of "meh". Nevertheless, the ongoing speculation as to the Royal Commission findings, in tandem with COVID, had resulted in Japara's shares trading down 75% in the last five, and ~60% a-piece for Regis and Estia in the same time frame, at that time.</p>
<p>Neither company, to date, has comprehensively addressed the conclusions of the report.</p>
<h3>The New News</h3>
<p>JHC <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02369261-3A566260?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> this morning it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.</p>
<p>JHC said it is reviewing its options.</p>
<p>My initial reaction is that this is an opportunistic bid. This is the third Offer in this space in the last year. <a href="https://www.smartkarma.com/entities/metlifecare-ltd" target="_blank" data-smartkarma-citation="entities:19219:1" rel="noopener">Metlifecare Ltd (MET NZ)</a> was eventually taken private.  Regis fielded an Offer from its co-founder and <a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">Washington H. Soul Pattinson And Co. (SOL AU)</a> in September last year, which was subsequently withdrawn, despite a bump in terms. Regis has outperformed the market since.</p>
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<div>More below the fold.</div>
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An Australian Royal Commission on aged care providers was issued on the 26 February 2021 with 148 recommendations to address what was deemed a weak and ineffective regulatory arrangement, including a new aged care act, the introduction of a system of star rating system for facilities, and some form of aged care levy for the funding of the system. The government also made an initial pledged of $452mn in additional funding.
The share price reaction to the report from the three key aged-care Aussie listed operators - Regis Healthcare (REG AU), Estia Health (EHE AU), and Japara Healthcare (JHC AU) - was largely one of "meh". Nevertheless, the ongoing speculation as to the Royal Commission findings, in tandem with COVID, had resulted in Japara's shares trading down 75% in the last five, and ~60% a-piece for Regis and Estia in the same time frame, at that time.
Neither company, to date, has comprehensively addressed the conclusions of the report.
The New News
JHC announced this morning it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.
JHC said it is reviewing its options.
My initial reaction is that this is an opportunistic bid. This is the third Offer in this space in the last year. Metlifecare Ltd (MET NZ) was eventually taken private.  Regis fielded an Offer from its co-founder and Washington H. Soul Pattinson And Co. (SOL AU) in September last year, which was subsequently withdrawn, despite a bump in terms. Regis has outperformed the market since.

More below the fold.


Japara Healthcare (JHC AU): Here Comes The Calvary

Jardine Strategic Holdings / Event-Driven

<p>Since <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>'s surprise <a href="https://links.sgx.com/FileOpen/JMH%20J.ashx?App=Announcement&amp;FileID=651169" target="_blank" rel="noopener">announcement</a> earlier this week to acquire the 15.11% in <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a> it does not own, I've fielded numerous questions concerning:</p>
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<li>Who is entitled to vote at the forthcoming shareholder meeting for Strategic?</li>
<li>What rights do minorities have if they object to the Offer?</li>
<li>Why is there not a shareholder meeting for Matheson shareholders to vote on the acquisition of Strategic?</li>
<li>What is an effective economic interest in a cross-holding?</li>
</ul>
<p>This insight answers these questions, among others.</p>
<p>Shareholders may feel aggrieved - and Matheson is getting Strategic for a bargain if simply eye-balling the long-term price chart.</p>
<p>But the risk to holding Strategic has been present ever since the Jardine's group moved the primary listings of their companies to the UK's Standard Board in 2014 from the Primary Board. </p>
<p>For a more detailed run-through of the transaction itself, please refer to <em><a href="https://skr.ma/p6cqh" target="_blank" rel="noopener">Jardine Matheson: Collapsing The Circularity</a></em>.</p>
<p>More below the fold. </p>

Since Jardine Matheson Holdings (JM SP)'s surprise announcement earlier this week to acquire the 15.11% in Jardine Strategic Holdings (JS SP) it does not own, I've fielded numerous questions concerning:

Who is entitled to vote at the forthcoming shareholder meeting for Strategic?
What rights do minorities have if they object to the Offer?
Why is there not a shareholder meeting for Matheson shareholders to vote on the acquisition of Strategic?
What is an effective economic interest in a cross-holding?

This insight answers these questions, among others.
Shareholders may feel aggrieved - and Matheson is getting Strategic for a bargain if simply eye-balling the long-term price chart.
But the risk to holding Strategic has been present ever since the Jardine's group moved the primary listings of their companies to the UK's Standard Board in 2014 from the Primary Board. 
For a more detailed run-through of the transaction itself, please refer to Jardine Matheson: Collapsing The Circularity.
More below the fold. 

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<p><a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">Washington H. Soul Pattinson And Co. (SOL AU)</a> ("Soul Patts") has teamed up with Bryan Dorman, co-founder of aged-care provider <a href="https://www.smartkarma.com/entities/regis-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:2086:1" rel="noopener">Regis Healthcare (REG AU)</a>, in making a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02311146-3A555888?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">non-binding indicative proposal</a> of A$1.85/share by way of a Scheme. The Offer implies an equity value of A$557mn and an enterprise value of A$773mn.</p>
<p>The Offer Price is a 25% premium to the last close and a 64% premium to the three-month VWAP.</p>
<p>Dorman, via Ashburn P/L, holds 27.2% in Regis. Ian Roberts, Regis' other co-founder, holds 27.2%.</p>
<p>A scrip alternative into a newly incorporated company is also proposed, in which Dorman will hold 27.2%, and Soul Patts a maximum of 72.8%, before any additional scrip taken up by Regis' shareholders.</p>
<p>As per the substantial shareholder <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02311153-3A555890?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announcement</a>, Soul Patts also made a non-binding and indicative offer for Regis on September 30, in "<em>partnership with a financial partner</em>". No other details relating to that proposal were disclosed.</p>
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<p>Regis was only listed on the <a href="https://www.regis.com.au/site/wp-content/uploads/pdf/Regis-Healthcare-Prospectus.pdf" target="_blank" rel="noopener">14 October 2014</a>, at $3.65/share.</p>
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<p>More below the fold.</p>
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Washington H. Soul Pattinson And Co. (SOL AU) ("Soul Patts") has teamed up with Bryan Dorman, co-founder of aged-care provider Regis Healthcare (REG AU), in making a non-binding indicative proposal of A$1.85/share by way of a Scheme. The Offer implies an equity value of A$557mn and an enterprise value of A$773mn.
The Offer Price is a 25% premium to the last close and a 64% premium to the three-month VWAP.
Dorman, via Ashburn P/L, holds 27.2% in Regis. Ian Roberts, Regis' other co-founder, holds 27.2%.
A scrip alternative into a newly incorporated company is also proposed, in which Dorman will hold 27.2%, and Soul Patts a maximum of 72.8%, before any additional scrip taken up by Regis' shareholders.
As per the substantial shareholder announcement, Soul Patts also made a non-binding and indicative offer for Regis on September 30, in "partnership with a financial partner". No other details relating to that proposal were disclosed.

Regis was only listed on the 14 October 2014, at $3.65/share.

More below the fold.


Regis Healthcare (REG AU): Potential New Home For The Old

Australia

Washington H. Soul Pattinson & Company Limited is an investment holding company. The Company owns shares and properties, coal mining, bulk handling, commercial television licensee, telecommunications carrier, merchant banking, funds management, pharmaceutical retailing, manufacture, processing and marketing of biscuits and cakes.

Washington H. Soul Pattinson and Co. Ltd (SOL AU)

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Washington H. Soul Pattinson and Co. Ltd (SOL AU)

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Regis Healthcare (REG AU): Potential New Home For The Old

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