In today’s briefing:
- Lifestyle International’s HK$5.00 Privatisation Bid
- Merger Arb Mondays (08 Aug) – Yashili, Lifestyle, Link, Infomedia, Ramsay, ResApp, Alliance Aviation
- Marui (8252 JP) – Increases Size of Delayed-Start Buyback, Cuts Yutai
- SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO
- Weekly Deals Digest (07 Aug) – Hongjiu Fruit, Link, Infomedia, Atlas Arteria, ResApp, DTAC/True
- OZ Minerals (OZL): BHP Offer Swiftly Rejected
- Lifestyle (1212 HK): Thomas Yau’s Scheme
- Kinetic&Globalvia/Go-Ahead: Increased Offer
Lifestyle International’s HK$5.00 Privatisation Bid
- Lifestyle International Holdings (1212 HK) announced a privatisation offer from Mr Lau, the controlling shareholder and Chairman, at HK$5.00 per scheme share, a 62.3% premium to the undisturbed price.
- The offer price is final. Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). No shareholder holds a blocking stake.
- The offer price is unattractive for long-term shareholders and below average sell-side price targets. Nevertheless, this deal likely goes through as the headcount test is not applicable.
Merger Arb Mondays (08 Aug) – Yashili, Lifestyle, Link, Infomedia, Ramsay, ResApp, Alliance Aviation
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
- Highest spreads are Lifestyle International Holdings (1212 HK), 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Yashili, ResApp.
- Lowest gross spreads are Excelpoint Technology (EXLP SP), Frasers Hospitality Trust (FHT SP), MyDeal.com.au Ltd (MYD AU), Cocoaland Holdings (COLA MK), True Corp Pcl (TRUE TB), China VAST.
Marui (8252 JP) – Increases Size of Delayed-Start Buyback, Cuts Yutai
- Marui Group (8252 JP) was a long-suffering Japanese retailer with generally sub-standard locations and “different” customer base, and much of its income came from consumer credit.
- Since a decade ago, helped by the rise of foreign tourism income, Marui has been redeveloping itself. Michael Causton‘s insights are a great help to understanding the background.
- They are aiming at non-stuff retailing. Friday saw earnings, cancellation of the yutai program, a slight div hike, and an increase in the already large buyback program. It’s interesting!
SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO
- SAIC Motor (600104 CH) completed the auction procedures for acquiring a 71.04% stake in Dongzheng Automotive Finance (2718 HK). This will trigger an unconditional MGO at HK$1.2430 per H Share.
- The offeror and Dongzheng are required to issue the composite document on or before 11 August jointly. However, an application has been made to the Executive to extend the deadline.
- At last close and for an end of September completion, the gross and annualised spread to the MGO price is 3.6% and 20.9%, respectively.
Weekly Deals Digest (07 Aug) – Hongjiu Fruit, Link, Infomedia, Atlas Arteria, ResApp, DTAC/True
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Chongqing Hongjiu Fruit (CHF HK) is pre-marketing a US$200-300m IPO.
- Event-Driven developments at Atlas Arteria (ALX AU), Genex Power Ltd (GNX AU), Infomedia Ltd (IFM AU), Link Administration (LNK AU), Ramsay Health Care (RHC AU), ResApp, DTAC/True, Dongzheng AFC.
OZ Minerals (OZL): BHP Offer Swiftly Rejected
- BHP Group Ltd (BHP AU) made a non-binding indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$25/share and was swiftly rejected.
- We feel an offer around the A$28.5-A$29/share range would get the OZ Minerals Ltd (OZL AU) Board to open up its books for due diligence.
- 3.25% of the outstanding shares have been shorted and the stock could trade higher than the BHP offer price. We’d wait for a price around A$25/share to enter.
Lifestyle (1212 HK): Thomas Yau’s Scheme
- Thomas Yau, Lifestyle International Holdings (1212 HK)‘s controlling shareholder, is offering to take the company private by way of a Scheme at HK$5/share, a 62.3% premium to last close.
- Independent shareholders comprise 23.51% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.351% of shares out.
- The Offer price is final. No dividends will be paid during the Offer period.
Kinetic&Globalvia/Go-Ahead: Increased Offer
- On 4 August, the consortium sweetened the offer by 50p, 3.3%, to 1,550p/share, comprising 1,450p+100p special dividend (conditional upon Scheme becoming Effective); 13.3x Fwd P/E and 7.9x EV/Fwd EBIT.
- Still below below the 8.6x EV/Fwd EBIT offered by DWS for Stagecoach, but the market believes that the deal will complete. Irrevocable undertakings plus letters of intent represent 26.86%.
- Gross spread is 1.04%, 8.66% estimated annual return (assuming settlement and paying of the special dividend on 22 September). Reiterate long GOG LN.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
