In today’s briefing:
- Ramsay Health’s Offer Spread Risk/Reward
- Virtus Health: Offer From BGH Now Ostensibly Unconditional
- ResApp Draws a Revised Binding Offer from Pfizer
- Thomson Medical (TMG SP)/Tmc Life Sciences (TMCL MK): Strong Recovery; Scale Expansion to Aid Growth
- WuXi AppTec (603259.CH/2359.HK) – Behind the Proposed Disposal of A Shares
- ClouDr IPO: Strong Business Model with Multiple Revenue Channels
Ramsay Health’s Offer Spread Risk/Reward
- Ramsay Health Care (RHC AU)‘s gross spread to KKR & Co Inc (KKR US)’s offer (less the interim dividend) of A$87.52 has widened touching an all-time high of 17.0% today.
- Despite the longer-than-expected due diligence, rising rates and market volatility, the evidence suggests that KKR remains committed. The expectation is for a binding proposal by June end.
- At the last close, the risk/reward profile is favourable as the downside due to a deal break (-10% estimated decline) is lower than the upside (+17%) from a binding offer.
Virtus Health: Offer From BGH Now Ostensibly Unconditional
- BGH now has >90% of the voting power in Virtus Health (VRT AU). In a somewhat friendly gesture, BGH has bumped the Offer by A$0.005/share.
- The increased Offer Price will apply to all shareholders who accept the Offer, including shareholders who have already accepted the Offer. The Offer has been extended to the 27 June.
- A special fully-franked dividend of up to A$0.30/share should now kick in – an announcement is expected shortly. The Offer remains conditional.
ResApp Draws a Revised Binding Offer from Pfizer
- Pfizer Inc (PFE US)’s revised binding proposal will vary based on the results of the clinical validation study of Resapp Health (RAP AU)’s COVID Algorithm (expected around 20 June).
- If the confirmatory data condition is satisfied, the offer is A$0.207 (130.0% premium to undisturbed price). If not satisfied, the offer is A$0.146 (62.2% premium to undisturbed price).
- The offers are within the IE’s valuation range. At the last close, the risk/reward is favourable as the potential upside (A$0.207 offer: +25.5%) exceeds the downside (A$0.146 offer: -11.5%).
Thomson Medical (TMG SP)/Tmc Life Sciences (TMCL MK): Strong Recovery; Scale Expansion to Aid Growth
- Thomson Medical Group Limited (TMG SP) is a dual play on the re-opening of both Singapore and Malaysia. The company has a 70% stake in Tmc Life Sciences (TMCL MK).
- The company is seeing strong recovery across all its business segments and is cautiously optimistic of its business prospects in the current financial year.
- The recent pullback in the shares provides a good entry point for long-term investors.
WuXi AppTec (603259.CH/2359.HK) – Behind the Proposed Disposal of A Shares
- Our interpretation of WuXi AppTec’s proposed disposal is that its founder affiliates could be concerned about the Company’s future prospects, so they choose to offload in advance.
- A possible reason for WuXi AppTec to highlight the optimism about its performance and deliver a prosperous outlook/positive signal to the market is to “shield” the implementation of its proposed disposal.
- The risk is out of proportion to the opportunity. We advised investors to catch the rebound and offload rather than hold long term. It’s just temporary rebound not complete reversal.
ClouDr IPO: Strong Business Model with Multiple Revenue Channels
- ClouDr was the largest digital chronic condition management solution provider in China. The company’ application for a HKEx IPO has been approved and plans to raise proceeds of around US$500m.
- The company is well positioned to benefit from growing demand for digital healthcare marketing and services in China driven by increased health awareness, technological advancements and prevalence of chronic conditions.
- In this insight, we examine the company’s business model, segments and financials.
Before it’s here, it’s on Smartkarma
