In today’s briefing:
- EOFlow (294090 KS): Suitably Pumped
- FSS Head Lee Made an Urgent TV Appearance Today to Discuss the Resumption of Short Selling
- Henlius Biotech (2696 HK): Fosun Offer?
- Henlius (2696 HK): Privatisation by Fosun Pharma?
- Tata Technologies IPO Lockup Expiry – US$1.5bn Lockup Release, Some Funds Are Sitting on 40x Gains
- Anglo American Rejects BHP’s Increased and Final Offer
- SciClone Pharmaceuticals (6600 HK): 19th June Shareholder Vote
EOFlow (294090 KS): Suitably Pumped
- For a company that strives to improve people’s lives, investors in EOFlow (294090 KS) shares have mostly faced a world of pain over the past year.
- After Insulet Corp (PODD US) filed a lawsuit on the 8th August 2023, accusing EOFlow of misappropriating trade secrets, patent infringement, and trademark dilution, shares declined ~88% by year-end.
- Earlier this month, the courts quashed Insulet’s preliminary injunction. EOFlow is up 200%. Insulet is up 3% (?). And Medtronic (MDT US), EOFlow’s prior suitor, is no doubt weighing options.
FSS Head Lee Made an Urgent TV Appearance Today to Discuss the Resumption of Short Selling
- Lee urgently appeard on TV today and said, “In June, we will explain whether and when short selling will be resumed, and what criteria we might use for the resumption.”
- He noted considering flexible partial short selling resumption even if only some conditions are met, contrasting the Presidential Office’s stance from two days ago.
- Presidential Office led short selling ban, now likely under FSC/FSS jurisdiction for resumption.
Henlius Biotech (2696 HK): Fosun Offer?
- Biopharmaceutical outfit Shanghai Henlius Biotech (2696 HK) is currently suspended pursuant to the Takeovers Code.
- Shanghai Fosun Pharmaceutical (Group) (2196 HK) holds ~60% in Henlius, mostly via domestic shares. Co-founders and Qatar Authority hold ~28% and 8% the H shares respectively.
- IF an Offer were to unfold, it would be the third in this space in the past two months, after Offers for Sciclone (6600 HK) and Yichang HEC (1558 HK),
Henlius (2696 HK): Privatisation by Fosun Pharma?
- Shanghai Henlius Biotech (2696 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” The likely bidder is Fosun Pharma.
- A merger by absorption would require approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection). There could also be a 90% minimum acceptance condition.
- The shares are 62% below the IPO price. However, shareholders with blocking stakes would welcome an offer suggesting a 30-40% takeover premium would be sufficient.
Tata Technologies IPO Lockup Expiry – US$1.5bn Lockup Release, Some Funds Are Sitting on 40x Gains
- Tata Technologies (TT) raised around US$370m in its India IPO in Dec 2023.
- Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
- In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.
Anglo American Rejects BHP’s Increased and Final Offer
- On 22 May, Anglo American rejected the last offer (0.8860) from BHP on execution risks, potential negative value impacts and additional approvals needed in South Africa. PUSU extended 29 May.
- I update my SOTP to 2938p. Copper Fair Value, in my opinion, is £17.70 per share. This contrasts with BHP’s current offer of £21.32/share for the entirety of Anglo’s rump.
- There is now a ~20.1% difference between the implied value of BHP’s offer and the share price of Anglo. The market assumes a lower likelihood of an agreed deal
SciClone Pharmaceuticals (6600 HK): 19th June Shareholder Vote
- On the 28th March, Li Zhenfu (SciClone (6600 HK)‘s NED), Assicurazioni Generali (G IM), and concert parties (collectively controlling 36.61%), made an Offer at $18.80/share, a 33.9% premium to undisturbed.
- The Offer price is bang in line with SciClone’s March 2021 IPO price. Terms were declared final. This is a clean deal.
- The Scheme Document is now out. The Court Meeting will be held on the 19th June. Expected payment on or before the 12 July. FWIW: IFA says fair & reasonable.
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