In today’s briefing:
- 51job (JOB US)’s Offer Price Back Up To $61
- LQD ETF Jumps with Largest 4-Day Rally Since May 2020
- Geek+ Tearsheet – Automating Warehouses
- Otis/Zardoya Otis: Game Almost Over
51job (JOB US)’s Offer Price Back Up To $61
- Back on the 12 January this year, 51 Job Inc (JOBS US) announced the Offeror had proposed reducing the merger consideration from US$79.05 in cash per common share to US$57.25.
- Yesterday 51job said it has entered into a revised merger agreement at US$61.00/share, a 6.55% bump in terms, but still 22.8% down the initial terms.
- Presumably, the amended proposal still requires no PRC regulatory filing. This transaction appears to be done this time, with completion in the 2Q22.
LQD ETF Jumps with Largest 4-Day Rally Since May 2020
One of the largest credit ETFs, the iShares iBoxx Investment Grade Corporate Bond ETF (known as LQD) rose by the most in a year, as per Bloomberg. The ETF also saw its biggest 4-day rally since May 2020. On February 24, the ETF traded at 122.4 and closed on March 1 at 124.97, up 2% during the period. LQD, which has an AUM of over $36bn. Bloomberg notes that the move, being an unexpected rebound comes at a time when short interest (Term of the Day, explained below) was at an all-time high. Short interest has now eased from almost 27% of outstanding shares to about 21%. “Spreads have widened to a point where investment-grade credit once again offers at least something resembling relative value”, said Dan Krieter, a strategist at BMO Capital Markets.
Geek+ Tearsheet – Automating Warehouses
- Geek+ is a smart logistics and warehousing robotics developer serving clientele from a number of industry verticals, including, apparel, e-commerce, retail, 3PL, pharmaceutical, manufacturing and automotive (think Amazon Kiva).
- In the latest Series C funding round, the company raised a total of US$200m with the most recent Series C2 round in Jun 2020, raising around US$50m.
- In the CY2H21, there were news reports regarding an IPO that could raise US$500m. Geek+ was considering either going public in the US or in Shanghai’s Nasdaq-style STAR board.
Otis/Zardoya Otis: Game Almost Over
- After prospectus approval, the acceptance period runs from 2 March until 1 April. Interloper risk is nil. Gross spread is a tiny 0.3%. Recommendation is long and tender.
- I still consider the offer to be cheeky: it implies 22.3x Fwd P/E and 13.9x EV/Fwd EBITDA, below the median of comparables at 26.5x Fw P/E and 15.8x EV/Fwd EBITDA.
- But the risks of not tendering are: share price dropping in the current Ukraine crisis context, reduced liquidity, and Otis may carry out a delisting if it reaches 75% acceptances.
Before it’s here, it’s on Smartkarma
