In today’s briefing:
- ESR Group (1821 HK): Offer Musings
- ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid
- Aozora (8304) – Daiwa Securities Group (8601) Tie-Up – Daiwa To Buy 15+%
- Go Digit General Insurance IPO – Growth Remains Strong, Valuation Isn’t Cheap
- The Art of the Deal
- Chongho Bridge Pre-IPO – Broad Offering Catered to Rural Consumers, However, Market Is Fragmented
- GBLI: Global Indemnity announced 1st quarter 2024 financial results which showed improved underwriting results and increasing net investment income.
- Hardman & Co Research on NB Private Equity Partners: Wider operating company EBITDA margins in 2023
- Crypto Crisp: Your Move, Gary Gensler
ESR Group (1821 HK): Offer Musings
- Back in February this year, various media sources reported that the key shareholders of warehouse/fund management play ESR Group (1821 HK), were exploring options, including a privatisation.
- Long-Term holders Warburg Pincus and Canadian pension fund OMERS hold 14% and 10.7% respectively. ESR co-founders/directors Jeffrey Shen, Stuart Gibson, Charles de Portes, and Hwee Chiang collectively hold another ~23%.
- Shares in ESR were suspended this morning “pursuant to the Hong Kong Code on Takeovers and Mergers“.
ESR Group (1821 HK): Starwood Capital and SSW Partners Gauging a Privatisation Bid
- ESR Group (1821 HK) is on a trading halt. Press reports suggest a consortium featuring Starwood Capital Group and SSW Partners is considering a buyout.
- Starwood and SSW are approaching other shareholders to join the consortium. The other members are likely Warburg Pincus, OMERS, Jinchu Shen, and Hwee Chiang Lim.
- The offer is likely to be structured as a Cayman privatisation scheme. Our best guess is that an offer of at least HK$14.00 per share would be needed.
Aozora (8304) – Daiwa Securities Group (8601) Tie-Up – Daiwa To Buy 15+%
- Pre-Open on February 1 2024, Aozora Bank Ltd (8304 JP) announced writedowns and a forecast revision, lowering full-year net profit expectations from +¥24bn to -¥28bn.
- Shares which had been trading relatively richly (and heavily shorted) fell sharply over the following days, then noted activist Murakami-san started buying in. Then he bought more and went silent.
- Today, Aozora reported full-year earnings – much worse than expected and Mar25 guidance lower than already low Street estimates. And they are selling 15% stake to Daiwa Securities Group. Oof!
Go Digit General Insurance IPO – Growth Remains Strong, Valuation Isn’t Cheap
- Go Digit General Insurance is looking to raise around US$315m in its India IPO.
- Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
- We have looked at the company’s performance in our past note. In this note, we talk about the refiling updates and valuations.
The Art of the Deal
- The last week of SPACs was packed with activity, including deals, bankruptcies, and IPOs.
- Two new deals are announced including a SPAC taking a digital commerce platform connecting buyers and sellers public, and a blank-cheque firm merging with a company producing large format projection screens for the entertainment industry.
- Also, a used car retailer could declare bankruptcy three years after debuting through a SPAC, and an advanced nuclear fission company sees its shares plummet after completing a SPAC merger.
Chongho Bridge Pre-IPO – Broad Offering Catered to Rural Consumers, However, Market Is Fragmented
- Chongho Bridge (2314866D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
- Chongho Bridge (CB) is an integrated services provider to China’s rural population. It offers rural inclusive credit services, agricultural production services, rural consumer goods and rural clean energy services.
- In this note, we look at the firm’s past performance.
GBLI: Global Indemnity announced 1st quarter 2024 financial results which showed improved underwriting results and increasing net investment income.
- Global Indemnity Group, LLC, provides specialty and niche insurance products nationwide.
- GBLI focuses on small market property and casualty business.
- The company has made a concerted effort to reduce its property exposure.
Hardman & Co Research on NB Private Equity Partners: Wider operating company EBITDA margins in 2023
- We reviewed NBPE’s business model in our initiation, Co-investments generating superior performance.
- We noted the high-secular-growth and downside-resilient investee companies, the value added by GPs, the good co-investing cashflow and return profile and the value added by the NB. The 2023 results confirmed all these trends.
- The key numbers were i) NAV p/sh $28.07 (£22.02), ii) private portfolio +5.3% in 2023 on a constant currency basis, iii) EV/LTM EBITDA 14.9x, and iv) debt/EBITDA 5.3x.
Crypto Crisp: Your Move, Gary Gensler
- We have entered the week before the U.S. Securities and Exchange Commission (SEC) must decide on VanEck’s Ethereum spot ETF application, with a decision due next Thursday, May 23.
- It is expected that the outcome for this application will set a precedent for all the other Ethereum ETF applications.
- This issue of Crypto Crisp focuses extensively on the Ethereum spot ETF.
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