Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Homecoming For Chinese Companies: Appraisal Rights & Fair Value

Trina Solar: Appraisal Rights Judgment Another Setback for Dissenters

58.com: Offeror No Stranger To Privatisations. And Controversy

58.com: Done Deal If Tencent Joins Consortium

Ostensibly, Tencent Supports 58.com's Firm Offer

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Quiddity Advisors

Event-Driven

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Back on the 2 April, China's <a href="https://www.smartkarma.com/entities/58-com-inc-adr" target="_blank" data-smartkarma-citation="entities:2563:1" rel="noopener">58.Com Inc (WUBA US)</a> received a preliminary, nonbinding <a href="https://sec.report/Document/0001104659-20-042699/" target="_blank" rel="noopener">proposal</a> from Ocean Link Partners, at $27.50 per Class A or Class B ordinary share, or $55/ADS, a 17.88% premium to last close. This was followed on the 20 April with 58.com <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=114974426&amp;type=PDF&amp;symbol=WUBA&amp;companyName=58.com+Inc.+American+Depositary+Shares+each+representing+2+Class+A&amp;formType=6-K&amp;dateFiled=2020-04-30&amp;CK=1525494" target="_blank" rel="noopener">announcing</a> it had received a preliminary &amp; non-binding Offer from the Buyer Group, comprising Ocean Link Partners and Warburg Pincus Asia LLC, General Atlantic Singapore Fund, and Jinbo Yao, 58.com's chairman and chief executive officer. The indicative Offer Price remained at $55/ADS. A definitive Agreement and Plan of Merger was <a href="http://58.investorroom.com/2020-06-15-58-com-Enters-into-a-Definitive-Agreement-for-Going-Private-Transaction" target="_blank" rel="noopener">announced</a> on the 15 June, with the consideration price marginally sweetened to $56/ADS, a 19.9% premium to the undisturbed price.
Under the merger agreement, the Buyer Group has formed a new holding entity, Quantum Bloom Group Ltd (Parent).
Yao entered into a support agreement with the Parent such that Yao will roll over his stake in 58.com (42% of the voting power) into newly-issued shares of Parent. General Atlantic <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115087118&amp;type=PDF&amp;symbol=WUBA&amp;companyName=58.com+Inc.+American+Depositary+Shares+each+representing+2+Class+A&amp;formType=SC+13D%2FA&amp;dateFiled=2020-06-22&amp;CK=1525494" target="_blank" rel="noopener">elected</a> on June 21, 2020 not to roll over its stake (2% of the voting power), electing its shares be cancelled in exchange for the merger consideration. That bumped the financing for the merger by US$400.4mn.
Additionally, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> entered into a rollover agreement with the parent on the <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115079126&amp;type=PDF&amp;symbol=WUBA&amp;companyName=58.com+Inc.+American+Depositary+Shares+each+representing+2+Class+A&amp;formType=SC+13D%2FA&amp;dateFiled=2020-06-17&amp;CK=1525494" target="_blank" rel="noopener">15 June</a>, such that Tencent will roll over its existing stake (28.3% of the voting power) into newly-issued ordinary shares of Parent.
The Merger requires the affirmative vote of two-thirds of 58.com's total voting power (present and via proxy) at an EGM. This will be held on the 7 September - this coming Monday. Yao and General Atlantic will vote their collective 44.02% voting power in favour of the merger. Tencent is not obligated to vote in a specific way under its rollover Agreement. But assuming Tencent does, its 28.3% voting power takes the total to 72.3% - exceeding the two-thirds threshold.
The low-ball offer was not lost on investors. Lawyers Halper Sadeh set up a site for assist investors to "obtain the best possible consideration".
This was followed by proxy advisors reports from both Glass Lewis and ISS recommending shareholder vote AGAINST the proposal. 
But this is a done deal. The alternative avenue is the long-dated appraisal rights route.
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As always, more below the fold.
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Back on the 2 April, China's 58.Com Inc (WUBA US) received a preliminary, nonbinding proposal from Ocean Link Partners, at $27.50 per Class A or Class B ordinary share, or $55/ADS, a 17.88% premium to last close. This was followed on the 20 April with 58.com announcing it had received a preliminary &amp; non-binding Offer from the Buyer Group, comprising Ocean Link Partners and Warburg Pincus Asia LLC, General Atlantic Singapore Fund, and Jinbo Yao, 58.com's chairman and chief executive officer. The indicative Offer Price remained at $55/ADS. A definitive Agreement and Plan of Merger was announced on the 15 June, with the consideration price marginally sweetened to $56/ADS, a 19.9% premium to the undisturbed price.
Under the merger agreement, the Buyer Group has formed a new holding entity, Quantum Bloom Group Ltd (Parent).
Yao entered into a support agreement with the Parent such that Yao will roll over his stake in 58.com (42% of the voting power) into newly-issued shares of Parent. General Atlantic elected on June 21, 2020 not to roll over its stake (2% of the voting power), electing its shares be cancelled in exchange for the merger consideration. That bumped the financing for the merger by US$400.4mn.
Additionally, Tencent Holdings (700 HK) entered into a rollover agreement with the parent on the 15 June, such that Tencent will roll over its existing stake (28.3% of the voting power) into newly-issued ordinary shares of Parent.
The Merger requires the affirmative vote of two-thirds of 58.com's total voting power (present and via proxy) at an EGM. This will be held on the 7 September - this coming Monday. Yao and General Atlantic will vote their collective 44.02% voting power in favour of the merger. Tencent is not obligated to vote in a specific way under its rollover Agreement. But assuming Tencent does, its 28.3% voting power takes the total to 72.3% - exceeding the two-thirds threshold.
The low-ball offer was not lost on investors. Lawyers Halper Sadeh set up a site for assist investors to "obtain the best possible consideration".
This was followed by proxy advisors reports from both Glass Lewis and ISS recommending shareholder vote AGAINST the proposal. 
But this is a done deal. The alternative avenue is the long-dated appraisal rights route.


As always, more below the fold.


58.com: Foregone Conclusion Amidst Proxy Advisor Pushback

58.Com Inc Adr

58.com: Foregone Conclusion Amidst Proxy Advisor Pushback