In today’s briefing:
- Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs
- Hollysys (HOLI US): Dazheng Consortium “Trumps” Ascendent’s Bid
- Updated NAV on SK Inc Post 660 Billion Pre-IPO Investment in SK Pharmteco
- Whispir (WSP AU) Backs Soprano’s Bump
- OreCorp (ORR AU): Silvercorp Switches to a Takeover Offer to Counter Perseus
Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs
- On 27 December, Kum Yang announced that its shares will be listed on the US stock market in the form of DRs, resulting in its shares rising by 11.7%.
- The listing of Kum Yang ADRs is likely to have a short-term positive impact on its share price as this is likely to reduce free float of local common shares.
- Nonetheless, over the next 6-12 months, we expect Kum Yang’s share price to trade much lower (30% or more) as its shares are highly overvalued.
Hollysys (HOLI US): Dazheng Consortium “Trumps” Ascendent’s Bid
- On the 13 December, Bloomberg reported that the Recco-led group consortium was weighing a revised Offer to be “significantly higher than the $26.50-a-share cash offer from Ascendent Capital”
- On the 24 December, a buyer consortium led by Dazheng Group announced an all-cash proposal of US$29.00/share, a 9.4% premium to Ascendent’s Offer. “Credible” financing is in place.
- “The Consortium stands ready to engage with the Board“. The Board should engage. The one curious aspect of this latest Offer is the apparent absence of Recco’s involvement.
Updated NAV on SK Inc Post 660 Billion Pre-IPO Investment in SK Pharmteco
- It was reported today that SK Pharmteco completed a 660 billion won in pre-IPO funding valuing the company at 4 trillion won.
- Prior to this investment, SK Inc owned a 100% stake in SK Pharmteco. After this investment, it is estimated that SK Inc will own about 83.5% stake in SK Pharmteco.
- Our base case valuation of SK Inc is NAV of 19.0 trillion won (NAV per share of 258,967 won), representing a 47% upside from current levels.
Whispir (WSP AU) Backs Soprano’s Bump
- Soprano has upped its Offer for Whispir Ltd (WSP AU) to A$0.55/share, and has secured board support.
- Pendula has a higher (indicative) Offer of A$0.60/share; however Whispir sees Soprano’s terms as superior due to the “conditionality, uncertainty and timing of progressing to a binding transaction with Pendula”.
- Soprano’s Offer for Whispir closes on the 10 January – unless extended.
OreCorp (ORR AU): Silvercorp Switches to a Takeover Offer to Counter Perseus
- Silvercorp Metals (SVM US) has switched to an off-market takeover offer. The Orecorp Ltd (ORR AU) consideration remains unchanged at A$0.19 cash and 0.0967 SVM shares per ORR share.
- The takeover offer is conditional on a 50.1% minimum acceptance condition, achievable in the absence of a superior proposal.
- The crucial question is whether Perseus Mining (PRU AU) is comfortable with SVM effectively controlling ORR. We think that there is a low probability of Perseus launching a competing proposal.
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