IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

Kanzhun IPO: Growth/Margin Trade-Off Vs Peers

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> announced an updated non-binding privatisation proposal. As a reminder, on 17 September 2020, 51job disclosed a non-binding privatisation proposal from DCP Capital Partners, a PE firm in Asia, at $79.05 in cash per common share. The updated proposal keeps the bid price unchanged but discloses the formation of a consortium. The initial consortium members are DCP, Ocean Link Partners and Mr Rick Yan, the CEO since 2000. The unchanged offer price is a premium of 25.38% to the VWAP during the last 30 days and an 18.82% premium to the VWAP during the last 30 days preceding the original proposal (on 17 September 2020). The press release mentions that the initial consortium members hold 17.62% of the total voting power of the issued and outstanding shares. The initial consortium members will not sell their shares in any other competing transaction.As 51job is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Reaching the two-thirds threshold rests on the consortium’s ability to rope in <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> which holds 34.8% of outstanding shares. We think that the use of the phrase “initial consortium members” suggests that Recruit is close to joining the consortium or selling into the bid. We also note that Ocean Link’s successful privatisation of <a href="https://www.smartkarma.com/entities/58-com-inc-adr" target="_blank" data-smartkarma-citation="entities:2563:1" rel="noopener">58.Com Inc Adr (WUBA US)</a> through a consortium bodes well for roping in Recruit. <div class="content-highlight">Our analysis suggests that the initial consortium members along with supporting shareholders and/or additional consortium members could potentially hold 39.4 million shares representing 58.5% of outstanding shares. This level of support should be enough to get past the two-thirds shareholder approval threshold. At the current share price of $67.60, the gross spread is 17%.</div>

51 Job Inc Adr (JOBS US) announced an updated non-binding privatisation proposal. As a reminder, on 17 September 2020, 51job disclosed a non-binding privatisation proposal from DCP Capital Partners, a PE firm in Asia, at $79.05 in cash per common share. The updated proposal keeps the bid price unchanged but discloses the formation of a consortium. The initial consortium members are DCP, Ocean Link Partners and Mr Rick Yan, the CEO since 2000. The unchanged offer price is a premium of 25.38% to the VWAP during the last 30 days and an 18.82% premium to the VWAP during the last 30 days preceding the original proposal (on 17 September 2020). The press release mentions that the initial consortium members hold 17.62% of the total voting power of the issued and outstanding shares. The initial consortium members will not sell their shares in any other competing transaction.As 51job is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Reaching the two-thirds threshold rests on the consortium’s ability to rope in Recruit Holdings (6098 JP) which holds 34.8% of outstanding shares. We think that the use of the phrase “initial consortium members” suggests that Recruit is close to joining the consortium or selling into the bid. We also note that Ocean Link’s successful privatisation of 58.Com Inc Adr (WUBA US) through a consortium bodes well for roping in Recruit. Our analysis suggests that the initial consortium members along with supporting shareholders and/or additional consortium members could potentially hold 39.4 million shares representing 58.5% of outstanding shares. This level of support should be enough to get past the two-thirds shareholder approval threshold. At the current share price of $67.60, the gross spread is 17%.

51 Job Inc Adr

51job’s Updated Privatisation Bid