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

China May Scrap The Restriction of Childbirths - Impact on Baby Formula Related Stocks in China

China Mengniu Placement - Danone's Expected Exit - One and Done

Quiddity Advisors

Event-Driven

21 months and counting. That's how long <a href="https://www.smartkarma.com/entities/bellamy-s-australia-ltd" target="_blank" data-smartkarma-citation="entities:17377:1" rel="noopener">Bellamy's Australia (BAL AU)</a> has been waiting for approval from China's State Administration for Market Regulation (SAMR) to sell its infant formula products in China. Since that time, Bellamy's share price has fallen 60%.
<a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, 31.43% owned by SOE COFCO, has now announced a proposed acquisition of Bellamy by way of a <a href="https://www.asx.com.au/asxpdf/20190916/pdf/448jsjcnwp9ntm.pdf" target="_blank" rel="noopener">Scheme</a> at A$13.25/share, inclusive of a $0.60 share fully franked special dividend, for a total consideration of A$1.6bn or ~US$1bn.
The Offer, which has the unanimous backing from Bellamy's board, is a 59% premium to last close
A key condition to the Scheme is the approval from Australia's FIRB.
Bellamy is ostensibly a manufacturing and marketing company. It sources raw materials, such as milk powder (the key ingredient) from farmers domestically and abroad (such as New Zealand). Bellamy does not own the upstream supply chain - no farms, not even any cows. No asset that could be deemed "<a href="https://cicentre.gov.au/document/P50S011" target="_blank" rel="noopener">critical infrastructure</a>". 
The vexing issue is that Bellamy's share price decline is the result of regulatory imposed restrictions on infant formula products into China, issues that, some might conclude, could go away if this SOE-backed takeover completes.
Bellamy closed at $12.87, a gross/annualised spread of 2.9%/11.3%, assuming completion before year-end. The Offer looks a little opportunistic. Yet SAMR approval remains outstanding, potentially side-lining alternative interested suitors. I think this deal will get up.

21 months and counting. That's how long Bellamy's Australia (BAL AU) has been waiting for approval from China's State Administration for Market Regulation (SAMR) to sell its infant formula products in China. Since that time, Bellamy's share price has fallen 60%.
China Mengniu Dairy Co (2319 HK), 31.43% owned by SOE COFCO, has now announced a proposed acquisition of Bellamy by way of a Scheme at A$13.25/share, inclusive of a $0.60 share fully franked special dividend, for a total consideration of A$1.6bn or ~US$1bn.
The Offer, which has the unanimous backing from Bellamy's board, is a 59% premium to last close
A key condition to the Scheme is the approval from Australia's FIRB.
Bellamy is ostensibly a manufacturing and marketing company. It sources raw materials, such as milk powder (the key ingredient) from farmers domestically and abroad (such as New Zealand). Bellamy does not own the upstream supply chain - no farms, not even any cows. No asset that could be deemed "critical infrastructure". 
The vexing issue is that Bellamy's share price decline is the result of regulatory imposed restrictions on infant formula products into China, issues that, some might conclude, could go away if this SOE-backed takeover completes.
Bellamy closed at $12.87, a gross/annualised spread of 2.9%/11.3%, assuming completion before year-end. The Offer looks a little opportunistic. Yet SAMR approval remains outstanding, potentially side-lining alternative interested suitors. I think this deal will get up. 

Bellamy's Australia

Bellamy Cowed Into Mengniu's Offer?