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

Tysan / HNA Group - Blackstone Exits and HNA Takes Over

Quiddity Advisors

Event-Driven

Late Friday night, <a href="https://www.smartkarma.com/entities/16401" target="_blank" data-smartkarma-citation="entities:16401:1">Hong Kong International Construction Investment Management Group Co., (687 HK)</a> ("HKICIM") <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2019/0308/LTN201903081182.pdf" target="_blank">announced</a> HNA Finance had entered into a SPA in which Times Holdings, a Blackstone-controlled vehicle, had conditionally agreed to buy 69.54% of HKICIM's issued shares for HK$3/share in an HK$7bn transaction. Should the SPA complete, Times will make a mandatory unconditional offer - also at $3.00/share (14.5% premium to last close) - for the remaining 30.46% of shares out.
This proposal arrives nearly three years after HNA <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2016/0420/LTN20160420023.pdf" target="_blank">bought</a> a 66% in Tysan Holdings  - as HKICIM was previously known - from Blackstone for HK$4.53 per share, triggering an <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2016/0707/LTN20160707009.pdf" target="_blank">MGO</a>.
This share sale underlines HNA Group's ongoing strategy to ease its debt burden and align its core business focus towards aviation, not construction and property.
HKICIM made headlines in the past not just for its eye-watering property acquisitions at Kai Tak (up to HK$13.5k/sqft in March 2017), the former site of Hong Kong's international airport; but that HNA was also oddly motivated to acquire these parcels of land at record breaking prices to "<a href="https://www.scmp.com/business/companies/article/2099902/hna-sell-flats-hong-kong-staff-cost-after-muscling-citys-real" target="_blank">snatch land and pricing power from the city’s real estate cartel</a>".
HKICIM <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2019/0201/LTN201902013441.pdf" target="_blank">sold</a> its last Kai Tak site to <a href="https://www.smartkarma.com/entities/52" target="_blank" data-smartkarma-citation="entities:52:1">Wheelock &amp; (20 HK)</a> last month (for a loss of $740mn), leaving the company with an estimated net cash position of ~$6.0bn (using FY18 interim numbers) or ~$1.80/share, it's foundation piling operations, a development site in Hong Kong and a residential and commercial property development project in Shenyang.
The closing of the SPA is subject to the satisfaction or waiver of various conditions. However, the short time frame (13 business days from this announcement) in which to secure, fulfill or waive these conditions suggest minimal deal risk.
This will trade tight to, if not through terms, with an anticipated completion late April. There will be no bump to the Offer. Times does not intend to avail itself to compulsory acquisition and intends to maintain HKICIM's listing; while both Times and HKICIM will take appropriate steps to maintain a sufficient public float after the close of the Offer.

Late Friday night, Hong Kong International Construction Investment Management Group Co., (687 HK) ("HKICIM") announced HNA Finance had entered into a SPA in which Times Holdings, a Blackstone-controlled vehicle, had conditionally agreed to buy 69.54% of HKICIM's issued shares for HK$3/share in an HK$7bn transaction. Should the SPA complete, Times will make a mandatory unconditional offer - also at $3.00/share (14.5% premium to last close) - for the remaining 30.46% of shares out.
This proposal arrives nearly three years after HNA bought a 66% in Tysan Holdings  - as HKICIM was previously known - from Blackstone for HK$4.53 per share, triggering an MGO.
This share sale underlines HNA Group's ongoing strategy to ease its debt burden and align its core business focus towards aviation, not construction and property.
HKICIM made headlines in the past not just for its eye-watering property acquisitions at Kai Tak (up to HK$13.5k/sqft in March 2017), the former site of Hong Kong's international airport; but that HNA was also oddly motivated to acquire these parcels of land at record breaking prices to "snatch land and pricing power from the city’s real estate cartel".
HKICIM sold its last Kai Tak site to Wheelock &amp; (20 HK) last month (for a loss of $740mn), leaving the company with an estimated net cash position of ~$6.0bn (using FY18 interim numbers) or ~$1.80/share, it's foundation piling operations, a development site in Hong Kong and a residential and commercial property development project in Shenyang.
The closing of the SPA is subject to the satisfaction or waiver of various conditions. However, the short time frame (13 business days from this announcement) in which to secure, fulfill or waive these conditions suggest minimal deal risk.
This will trade tight to, if not through terms, with an anticipated completion late April. There will be no bump to the Offer. Times does not intend to avail itself to compulsory acquisition and intends to maintain HKICIM's listing; while both Times and HKICIM will take appropriate steps to maintain a sufficient public float after the close of the Offer.

Another MGO For HKICIM As HNA Sells Stake Back To Blackstone