Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst with experience in fundamental and event-driven research in Frontier and Emerging markets. 

On Smartkarma, I mainly publish insights on index flow events in the Asia-Pacific region. This includes predicting regular and intra-review index changes and estimating upcoming passive flows. I also cover special situations such as mergers & acquisitions, equity offerings, buybacks, and other corporate restructuring events.

Pan-Asia Index Flows & Special Situations

3P Learning (3PL AU): Ed-Tech Deal Faces a New Twist

3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction

3P Learning (3PL): Steady Through the 3Rs, Eyes on FY24

3P Learning (3PL AU) : Ed-Tech Cash Deal Now Trading with a View to Complete?

Quiddity M&A: Australia Foreign Investment Reforms

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Previously, on 14th August 2020, <a href="https://www.smartkarma.com/entities/3p-learning-ltd" target="_blank" data-smartkarma-citation="entities:5708:1" rel="noopener">3P Learning (3PL AU)</a> entered into a <a href="https://www.asx.com.au/asxpdf/20200814/pdf/44lhf0sl8gkn8p.pdf" target="_blank" rel="noopener">Scheme Implementation Agreement</a> with privately-owned US-based competitor <a href="https://www.ixl.com/" target="_blank" rel="noopener">IXL Learning</a> ("IXL") in an all-cash Deal that valued the company at a market cap of A$189mn (US$137mn). The Offer Price was A$1.35/share and the Target Board unanimously recommended the Deal to the shareholders. 
Until early-October 3PL shares were trading tight to terms with a view to complete. However, media reports of top shareholder Viburnum Funds turning hostile to the transaction caused the share price to decline sharply on 7th October and since then the Deal has been trading wide. 
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In <a href="https://www.smartkarma.com/insights/3p-learning-3pl-au-ed-tech-cash-deal-now-trading-with-a-view-to-complete" target="_blank" data-smartkarma-citation="insights:42341" rel="noopener">3P Learning (3PL AU) : Ed-Tech Cash Deal Now Trading with a View to Complete?</a>, I wrote...
"I did not find any mention of any of the top ten shareholders in the SIA, nor is there any mention of irrevocable agreement to agree in the document or in the press except for the directors who have agreed to vote for. This is unusual when there are some very large shareholders in place. To me, this reflects the possibility someone else could come over the top and make a big push to win the deal if they sign one of the big shareholders. Viburnum by itself would represent a virtual blocking stake for any deal - scheme or Takeover." 
That is exactly what has happened now. 
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Since IXL's bid, Vibernum has raised its stake from 22.8% to 24.95% which effectively is now a blocking stake and on 12th November 2020, Indian ed-tech giant Think and Learn (which operates under the brand name BYJU's) launched a competitive <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02308250-2A1263430?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">Non-binding Indicative Proposal</a> at an Offer Price of A$1.45/share which is around 7.4% higher than what IXL offered. 
More below the fold. 
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For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a> 
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Previously, on 14th August 2020, 3P Learning (3PL AU) entered into a Scheme Implementation Agreement with privately-owned US-based competitor IXL Learning ("IXL") in an all-cash Deal that valued the company at a market cap of A$189mn (US$137mn). The Offer Price was A$1.35/share and the Target Board unanimously recommended the Deal to the shareholders. 
Until early-October 3PL shares were trading tight to terms with a view to complete. However, media reports of top shareholder Viburnum Funds turning hostile to the transaction caused the share price to decline sharply on 7th October and since then the Deal has been trading wide. 

In 3P Learning (3PL AU) : Ed-Tech Cash Deal Now Trading with a View to Complete?, I wrote...
"I did not find any mention of any of the top ten shareholders in the SIA, nor is there any mention of irrevocable agreement to agree in the document or in the press except for the directors who have agreed to vote for. This is unusual when there are some very large shareholders in place. To me, this reflects the possibility someone else could come over the top and make a big push to win the deal if they sign one of the big shareholders. Viburnum by itself would represent a virtual blocking stake for any deal - scheme or Takeover." 
That is exactly what has happened now. 

Since IXL's bid, Vibernum has raised its stake from 22.8% to 24.95% which effectively is now a blocking stake and on 12th November 2020, Indian ed-tech giant Think and Learn (which operates under the brand name BYJU's) launched a competitive Non-binding Indicative Proposal at an Offer Price of A$1.45/share which is around 7.4% higher than what IXL offered. 
More below the fold. 


For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms 


3P Learning (3PL AU) : Indian Ed-Tech Giant BYJU's Competitive Bid