Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst with experience in fundamental and event-driven research in Frontier and Emerging markets. 

On Smartkarma, I mainly publish insights on index flow events in the Asia-Pacific region. This includes predicting regular and intra-review index changes and estimating upcoming passive flows. I also cover special situations such as mergers & acquisitions, equity offerings, buybacks, and other corporate restructuring events.

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

On 13th August 2020, Taiwan-listed electronic manufacturing giant <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a> announced they would be acquiring the remaining 40% of shares in their subsidiary <a href="https://www.smartkarma.com/entities/casetek-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2929:1" rel="noopener">Casetek Holdings (5264 TT)</a> which they do not already own. Casetek is a company specializing in manufacturing light metal casings for electronic equipment - especially phones and laptops.The transaction will be implemented in the form of a "reverse triangular merger" between Casetek, Pegatron, and Pegasus Ace Limited (“Pegasus”) which will be a 100% owned SPV of Pegatron created specifically for this transaction. Following the completion of the Deal, Pegasus will cease to exist while Casetek will be the surviving entity, and will be 100% owned by Pegatron. Casetek will also be delisted following the completion of the transaction. While called a merger, because it will be conditional on receiving Casetek shareholder approval and regulatory approvals, it looks like a Tender Offer where the Offer Price will be TWD87.50 per share in cash and the transaction is expected to close by end-Feb 2021. On Friday, Casetek shares closed at TWD83.40 after going limit up, translating to a gross spread of 4.9% with around 6.5 months to completion. It will likely trade narrower on Monday 17 August. In this insight, we take a look at the details of the transaction to evaluate the attractiveness of this spread. As always, there is more below the fold. <hr>For more information about M&amp;A rules, regulations, and practices in Taiwan, please refer to <a href="https://www.smartkarma.com/insights/quiddity-taiwan-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30640" rel="noopener">Quiddity Taiwan M&amp;A Guide 2019</a>. This deal, however, is being conducted under Cayman jurisdiction.

On 13th August 2020, Taiwan-listed electronic manufacturing giant Pegatron Corp (4938 TT) announced they would be acquiring the remaining 40% of shares in their subsidiary Casetek Holdings (5264 TT) which they do not already own. Casetek is a company specializing in manufacturing light metal casings for electronic equipment - especially phones and laptops.The transaction will be implemented in the form of a "reverse triangular merger" between Casetek, Pegatron, and Pegasus Ace Limited (“Pegasus”) which will be a 100% owned SPV of Pegatron created specifically for this transaction. Following the completion of the Deal, Pegasus will cease to exist while Casetek will be the surviving entity, and will be 100% owned by Pegatron. Casetek will also be delisted following the completion of the transaction. While called a merger, because it will be conditional on receiving Casetek shareholder approval and regulatory approvals, it looks like a Tender Offer where the Offer Price will be TWD87.50 per share in cash and the transaction is expected to close by end-Feb 2021. On Friday, Casetek shares closed at TWD83.40 after going limit up, translating to a gross spread of 4.9% with around 6.5 months to completion. It will likely trade narrower on Monday 17 August. In this insight, we take a look at the details of the transaction to evaluate the attractiveness of this spread. As always, there is more below the fold. For more information about M&amp;A rules, regulations, and practices in Taiwan, please refer to Quiddity Taiwan M&amp;A Guide 2019. This deal, however, is being conducted under Cayman jurisdiction.

Casetek - Pegatron: WFH Dynamics Mean Taiwan Cash Merger Trading Cheapish?