Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Alpha Networks (3380 TT): A Board Coup and Partial Offer To Control

Quiddity Advisors

Event-Driven

Two months ago and a bit, at the very end of April 2020, <a href="https://www.smartkarma.com/entities/d-link-corp" target="_blank" data-smartkarma-citation="entities:17983:1" rel="noopener">D Link Corp (2332 TT)</a> and <a href="https://www.smartkarma.com/entities/qisda-corp" target="_blank" data-smartkarma-citation="entities:17110:1" rel="noopener">Qisda Corp (2352 TT)</a> put forth an extraordinary proposal to dismiss the Chairman and CEO (John Lee (also known as Li Zhongwang) who had been Chairman and CEO of Taiwanese network hardware designer and manufacturer <a href="https://www.smartkarma.com/entities/alpha-networks-inc" target="_blank" data-smartkarma-citation="entities:1397:1" rel="noopener">Alpha Networks (3380 TT)</a> since 2003) in what appeared to have been a successful Board coup. Despite having the CEO for nearly two decades, he only held a small stake.Then Qisda announced it would conduct a Partial Tender Offer to buy between 5% and 19% of Alpha Networks, with a filing no later than 11 May and commencement no later than 12 May.My assumption at the time was that because of a lack of publicly available information to the contrary and their work together to oust John Lee, D Link and Qisda were effectively working together, which would mean that Qisda's goal of getting to what would be ~25.0-42.8% (depending on what the starting position was (media suggested 23.8%; filings suggest 100mm shares)) would be added to D Link's 20% to get to near-effective consolidation if not outright control for the pair. That would also raise the minimum pro-ration expectation quite a bit because the 5-19.1% to be purchased would come from the 55-60% which was not Qisda's 19+% to 23.8%, depending on what they owned at the time. That hope has been dashed as on Friday 10 July, D Link made a filing to the Taiwan Stock Exchange saying that it intended to tender its shares. That immediately lowers the upside to the pro-ration rate, and lowers the expected pro-ration rate. More detail below, along with pro-ration analysis and Arb Grids.

Two months ago and a bit, at the very end of April 2020, D Link Corp (2332 TT) and Qisda Corp (2352 TT) put forth an extraordinary proposal to dismiss the Chairman and CEO (John Lee (also known as Li Zhongwang) who had been Chairman and CEO of Taiwanese network hardware designer and manufacturer Alpha Networks (3380 TT) since 2003) in what appeared to have been a successful Board coup. Despite having the CEO for nearly two decades, he only held a small stake.Then Qisda announced it would conduct a Partial Tender Offer to buy between 5% and 19% of Alpha Networks, with a filing no later than 11 May and commencement no later than 12 May.My assumption at the time was that because of a lack of publicly available information to the contrary and their work together to oust John Lee, D Link and Qisda were effectively working together, which would mean that Qisda's goal of getting to what would be ~25.0-42.8% (depending on what the starting position was (media suggested 23.8%; filings suggest 100mm shares)) would be added to D Link's 20% to get to near-effective consolidation if not outright control for the pair. That would also raise the minimum pro-ration expectation quite a bit because the 5-19.1% to be purchased would come from the 55-60% which was not Qisda's 19+% to 23.8%, depending on what they owned at the time. That hope has been dashed as on Friday 10 July, D Link made a filing to the Taiwan Stock Exchange saying that it intended to tender its shares. That immediately lowers the upside to the pro-ration rate, and lowers the expected pro-ration rate. More detail below, along with pro-ration analysis and Arb Grids.

Alpha Networks - D-Link Decision Means Lower Pro-Ration?