Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

Veloxis Pharmaceuticals A/S, founded in 2002 as a spin-off from H. Lundbeck A/S, is a specialty pharmaceutical company focusing on improving the lives of transplant patients. The company’s mainstay drug is called Envarsus XR and it is already in the commercialisation stage.
On 25th November 2019, <a target="_blank">Asahi Kasei </a>a diversified chemical company in Japan, announced a tender offer to acquire 100% of the ordinary shares and warrants of Veloxis Pharmaceuticals. Asahi Kasei is offering to buy the public shareholding at DKK6.00 per share (paid in cash). 
The offer price for the two main shareholders (<a target="_blank">Lundbeckfond Invest A/S, Novo Holdings A/S</a>), the board of directors and management who collectively own 81.2% of the ordinary shares and warrants of Veloxis Pharmaceuticals is at a 26% discount (DKK4.45 per share paid in cash) to the public offer price. The above-mentioned shareholders, the board of directors and management are in support of the offer and the board of directors have unanimously recommended the minority shareholders to accept it.
The Offer Highlights
<ul>
<li>
<blockquote>The price of the Offer is DKK 6.00 in cash for each share in Veloxis (the ''Share Offer Price'') except for shares and warrants owned by the two majority shareholders and a group of directors who have accepted to tender their shares at DKK 4.45 in cash for each share in Veloxis (the ''Major Shareholders’ and Group of Directors’ Share Offer Price'')</blockquote>
</li>
<li>
<blockquote>Warrantholders will be offered a price corresponding to the Share Offer Price or the Major Shareholders’ and Group of Directors’ Share Offer Price, as applicable, with the deduction of the pre-fixed exercise price for each of the warrants</blockquote>
</li>
<li>
<blockquote>The two majority shareholders of Veloxis, Novo Holdings A/S and Lundbeckfond Invest A/S have together with the CEO of Veloxis, Mr. Craig Collard, the CFO of Veloxis, Ms. Ira Duarte, as well as the rest of the group's management team and the members of Veloxis' board of directors, irrevocably undertaken to accept the Offer at the Major Shareholders' and Group of Directors’ Share Offer Price, subject to certain customary conditions. Also, the Veloxis group's management team and the members of Veloxis' board of directors have irrevocably undertaken to accept the Offer in respect of their warrants in Veloxis, subject to customary conditions. The irrevocable undertakings represent jointly approximately 81.2 percent of the voting rights and share capital in Veloxis.</blockquote>
</li>
<li>
<blockquote>The Share Offer Price of DKK 6.00 for all shares held by shareholders other than the major shareholders and the members of the board of directors and the management of Veloxis represents:</blockquote>
</li>
<li>
<blockquote>a premium of 6% compared to the 30-trading day volume weighted average share price of DKK 5.68 for the period of October 14, 2019 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>a premium of 14% compared to the 60-trading day volume weighted average share price of DKK 5.25 for the period of September 02, 2019 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>a premium of 36% compared to the six-month volume weighted average share price of DKK 4.41 for the period of May 23, 2019 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>a premium of 75% compared to the one-year volume weighted average share price of DKK 3.43 for the period of November 23, 2018 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>The board of directors of Veloxis has unanimously decided that it will recommend that the shareholders of Veloxis accept the Offer</blockquote>
</li>
<li>
<blockquote>The Offer will be made subject to a number of customary conditions, as well as a requirement that the total number of tendered shares and warrants in the Offer will amount to more than eighty percent (80.0%) of the voting rights and share capital of Veloxis after conversion of the warrants to Veloxis shares, and that necessary approvals by relevant regulatory authorities are obtained.</blockquote>
</li>
<li>
<blockquote>The Offeror will, as soon as possible and no later than 4 weeks from today, publish an offer document with detailed information about the Offer</blockquote>
</li>
<li>
<blockquote>The offer period under the Offer is expected to be approximately four weeks, subject to any extension of the offer period by the Offeror in accordance with the terms and conditions of the Offer</blockquote>
</li>
<li>
<blockquote>The consideration will be paid in cash out of funds which the Offeror already holds or otherwise have available, ready for settlement</blockquote>
</li>
</ul>
Source: Company Disclosure

Veloxis Pharmaceuticals A/S, founded in 2002 as a spin-off from H. Lundbeck A/S, is a specialty pharmaceutical company focusing on improving the lives of transplant patients. The company’s mainstay drug is called Envarsus XR and it is already in the commercialisation stage.
On 25th November 2019, Asahi Kasei a diversified chemical company in Japan, announced a tender offer to acquire 100% of the ordinary shares and warrants of Veloxis Pharmaceuticals. Asahi Kasei is offering to buy the public shareholding at DKK6.00 per share (paid in cash). 
The offer price for the two main shareholders (Lundbeckfond Invest A/S, Novo Holdings A/S), the board of directors and management who collectively own 81.2% of the ordinary shares and warrants of Veloxis Pharmaceuticals is at a 26% discount (DKK4.45 per share paid in cash) to the public offer price. The above-mentioned shareholders, the board of directors and management are in support of the offer and the board of directors have unanimously recommended the minority shareholders to accept it.
The Offer Highlights


The price of the Offer is DKK 6.00 in cash for each share in Veloxis (the ''Share Offer Price'') except for shares and warrants owned by the two majority shareholders and a group of directors who have accepted to tender their shares at DKK 4.45 in cash for each share in Veloxis (the ''Major Shareholders’ and Group of Directors’ Share Offer Price'')


Warrantholders will be offered a price corresponding to the Share Offer Price or the Major Shareholders’ and Group of Directors’ Share Offer Price, as applicable, with the deduction of the pre-fixed exercise price for each of the warrants


The two majority shareholders of Veloxis, Novo Holdings A/S and Lundbeckfond Invest A/S have together with the CEO of Veloxis, Mr. Craig Collard, the CFO of Veloxis, Ms. Ira Duarte, as well as the rest of the group's management team and the members of Veloxis' board of directors, irrevocably undertaken to accept the Offer at the Major Shareholders' and Group of Directors’ Share Offer Price, subject to certain customary conditions. Also, the Veloxis group's management team and the members of Veloxis' board of directors have irrevocably undertaken to accept the Offer in respect of their warrants in Veloxis, subject to customary conditions. The irrevocable undertakings represent jointly approximately 81.2 percent of the voting rights and share capital in Veloxis.


The Share Offer Price of DKK 6.00 for all shares held by shareholders other than the major shareholders and the members of the board of directors and the management of Veloxis represents:


a premium of 6% compared to the 30-trading day volume weighted average share price of DKK 5.68 for the period of October 14, 2019 to November 22, 2019


a premium of 14% compared to the 60-trading day volume weighted average share price of DKK 5.25 for the period of September 02, 2019 to November 22, 2019


a premium of 36% compared to the six-month volume weighted average share price of DKK 4.41 for the period of May 23, 2019 to November 22, 2019


a premium of 75% compared to the one-year volume weighted average share price of DKK 3.43 for the period of November 23, 2018 to November 22, 2019


The board of directors of Veloxis has unanimously decided that it will recommend that the shareholders of Veloxis accept the Offer


The Offer will be made subject to a number of customary conditions, as well as a requirement that the total number of tendered shares and warrants in the Offer will amount to more than eighty percent (80.0%) of the voting rights and share capital of Veloxis after conversion of the warrants to Veloxis shares, and that necessary approvals by relevant regulatory authorities are obtained.


The Offeror will, as soon as possible and no later than 4 weeks from today, publish an offer document with detailed information about the Offer


The offer period under the Offer is expected to be approximately four weeks, subject to any extension of the offer period by the Offeror in accordance with the terms and conditions of the Offer


The consideration will be paid in cash out of funds which the Offeror already holds or otherwise have available, ready for settlement


Source: Company Disclosure 

Asahi Kasei’s Voluntary Conditional Tender Offer for Veloxis Pharmaceuticals: Unfairly Priced