In today’s briefing:
- GAPack (468 HK): Hong Kong’s Takeovers Code Needs A PUSU Rule
- AVJennings (AVJ AU): Competing Offer Brewing
- EQD | Hong Kong Single Stock Options Weekly December 23 – 27
- Extension of Spain’s ‘Anti-Takeover Shield’ and Investor Concerns
- HK CEO & Director Dealings (31st Dec 2024): Weimob Inc., Midea Real Estate, Pharmaron Beijing
- UniCredit’s Strategic Stake in Commerzbank and Implications for a Takeover
GAPack (468 HK): Hong Kong’s Takeovers Code Needs A PUSU Rule
- In the UK, once a Bidder is named in a possible offer announcement, the Bidder has 28 days to either announce a firm Offer intention or walk away.
- This is known as a ‘put up or shut up’ or ‘PUSU’ deadline. Hong Kong’s takeover rules has no such provision.
- It’s ~21 weeks since co-founders Jeff Bi and Gang Hong tabled a non-binding Offer. With no firm Offer in sight, AND contesting a SAMR ruling, they should fold their tent.
AVJennings (AVJ AU): Competing Offer Brewing
- On 28 November, Avjennings Ltd (AVJ AU) disclosed a non-binding indicative proposal from AVID at A$0.67 per share, a 103.0% premium to the undisturbed price.
- On 27 December, Queensgate Investments became a substantial shareholder, representing 5.39% of outstanding shares. Ho Bee Land Ltd (HOBEE SP), a Singaporean real-estate developer, owns Queensgate.
- Ho Bee Land is a strategic investor and is likely contemplating a competing offer, mainly because AVID’s offer is below NTA and AVJennings’s controlling shareholder’s ties to Singapore.
EQD | Hong Kong Single Stock Options Weekly December 23 – 27
- Call volumes dominate tradng across single stocks with the Put/Call ratio hitting its 3rd lowest level since the beginning of November. Volumes continue trend lower in place since early November.
- Auto companies seeing big increases in option volumes with Li Auto and Great Wall Motor moving in opposite directions since the middle of the month.
- We add 2 new tables showing the largest volume increases across Puts and Calls – a conveient way to view unusual changes in trading activity.
Extension of Spain’s ‘Anti-Takeover Shield’ and Investor Concerns
- The Spanish government extended the anti-takeover shield to December 31, 2026, maintaining oversight of foreign direct investments in critical sectors like energy, defense, and technology to safeguard national interests.
- Investor concerns include regulatory uncertainty, lack of clear criteria, and expanded obligations under the 2023 Foreign Investment Law, deterring foreign investments and delaying significant projects.
- Balancing security and openness preserves free capital movement benefits, addressing vulnerabilities while avoiding protectionism that could harm competitiveness and strain relationships with foreign partners.
HK CEO & Director Dealings (31st Dec 2024): Weimob Inc., Midea Real Estate, Pharmaron Beijing
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
- The key stocks mentioned in this regular insight include: Weimob Inc. (2013 HK), Midea Real Estate Holding (3990 HK), and Pharmaron Beijing (3759 HK).
UniCredit’s Strategic Stake in Commerzbank and Implications for a Takeover
- UniCredit increased its economic exposure to Commerzbank to approximately 28%, aligning with its strategy to reach a 29.9% stake, pending ECB approval in early 2025.
- Commerzbank’s operational inefficiencies and valuation at 0.56x tangible book value highlight challenges for independence, reinforcing the rationale for a potential UniCredit takeover. My core position would be long Commerzbank.
- Projected synergies for a UniCredit-Commerzbank merger range from €705 million to €1.409 billion annually, with significant upside for Commerzbank’s share price if a takeover occurs.
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