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 Logistics (1589 HK): JD.com's Offer Comes Up Short

CLPH (1589 HK): MGO Imminent As Anti-Monopoly Approval Satisfied

CLPH (1589 HK): Composite Doc Out. Offer Now Open

China Logistics (1589 HK): Possible Offer As Major Shareholders Seek Exit

CLPH (1589 HK): No-Deal Or Business As Usual Following Placement?

CLPH (1589 HK): Free Float Breached As JD.com Bumps Stake

Quiddity Advisors

Event-Driven

China Logistics Property Holdings / Event-Driven

China Logistics Property Holdings (1589 HK)

<p>On the 29 December 2020, <a href="https://www.smartkarma.com/entities/china-logistics-property-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:22799:1" rel="noopener">China Logistics Property Holdings (1589 HK)</a> (CLPH) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1229/2020122901322.pdf" target="_blank" rel="noopener">announced</a> Li Shifa (chairman, holding ~28.2%) and RRJ Capital (~23.35%), were <em>"conducting a preliminary strategic review of their stakes</em>", indicating a possible change of control for the company. Shares gained 16.4% over the following three trading days. </p>
<p>Fast forward to the 9 June,  and CLPH <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0609/2021060900007.pdf" target="_blank" rel="noopener">announced</a> a placement of 220mn new shares at a placing price of $3.54/share, an 18.24% discount to last close. This was arguably not the news the market was anticipating, and shares closed down ~20% at HK$3.45 versus a post-money book value of ~HK$3.90. </p>
<p>That <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0617/2021061701380.pdf" target="_blank" rel="noopener">placement</a> was completed on the 17 June. Of interest, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> bumped its stake to 10.11%, on a fully diluted basis, from 9.87% (pre-placement), becoming a substantial shareholder in the process as defined in the Listing Rules. With JD.com no longer considered part of the float - which excludes shareholders with ≥10% of a company's voting power -  CLPH was now in breach of Hong Kong's public float.</p>
<p>The takeaway at the time was that JD.com was making a clear point it was not supportive of the placement. In addition, Li and RRJ didn't participate in the placement. </p>
<p>Then at the AGM on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0629/2021062901428.pdf" target="_blank" rel="noopener">29 June</a>, shareholders voted down the ordinary resolution giving CLPH's directors the mandate to purchase 10% of shares out. This was shortly followed by a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0707/2021070701481.pdf" target="_blank" rel="noopener">requisition for an EGM</a> from ESR Cayman (holding 18.1% of shares out) proposing four directors to the board. </p>
<p>On the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0722/2021072201203.pdf" target="_blank" rel="noopener">22 July</a>, "substantial shareholders (s)" - without naming names - had indicated to CLPH its intention to assist the Company to restore the public float by disposing of its existing shares to independent third parties.</p>
<p>Curiously, CLPH <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0817/2021081701346.pdf" target="_blank" rel="noopener">announce</a>d on the 17 August that Li has entered into a call option to acquire a non-core office asset from CLPH.</p>
<div>
<p>Shares increased 14% yesterday on massive volume, before shares were suspended at <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0826/2021082600505.pdf" target="_blank" rel="noopener">3.08pm</a> "<em>pending the release of an announcement which contains inside information</em>". </p>
<h3>The New News</h3>
<p>CLPH <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0826/2021082601774.pdf" target="_blank" rel="noopener">announced</a> that Li was is in discussion with a potential purchaser of 26.38% of the total issued shares, which, if completed, may lead to a change in control and a mandatory general offer.</p>
<p>Shares are off 5% today as I type, on sizeable volume.</p>
</div>
<div>
<p>More below the fold.</p>
</div>

On the 29 December 2020, China Logistics Property Holdings (1589 HK) (CLPH) announced Li Shifa (chairman, holding ~28.2%) and RRJ Capital (~23.35%), were "conducting a preliminary strategic review of their stakes", indicating a possible change of control for the company. Shares gained 16.4% over the following three trading days. 
Fast forward to the 9 June,  and CLPH announced a placement of 220mn new shares at a placing price of $3.54/share, an 18.24% discount to last close. This was arguably not the news the market was anticipating, and shares closed down ~20% at HK$3.45 versus a post-money book value of ~HK$3.90. 
That placement was completed on the 17 June. Of interest, JD.com Inc. (9618 HK) bumped its stake to 10.11%, on a fully diluted basis, from 9.87% (pre-placement), becoming a substantial shareholder in the process as defined in the Listing Rules. With JD.com no longer considered part of the float - which excludes shareholders with ≥10% of a company's voting power -  CLPH was now in breach of Hong Kong's public float.
The takeaway at the time was that JD.com was making a clear point it was not supportive of the placement. In addition, Li and RRJ didn't participate in the placement. 
Then at the AGM on the 29 June, shareholders voted down the ordinary resolution giving CLPH's directors the mandate to purchase 10% of shares out. This was shortly followed by a requisition for an EGM from ESR Cayman (holding 18.1% of shares out) proposing four directors to the board. 
On the 22 July, "substantial shareholders (s)" - without naming names - had indicated to CLPH its intention to assist the Company to restore the public float by disposing of its existing shares to independent third parties.
Curiously, CLPH announced on the 17 August that Li has entered into a call option to acquire a non-core office asset from CLPH.

Shares increased 14% yesterday on massive volume, before shares were suspended at 3.08pm "pending the release of an announcement which contains inside information". 
The New News
CLPH announced that Li was is in discussion with a potential purchaser of 26.38% of the total issued shares, which, if completed, may lead to a change in control and a mandatory general offer.
Shares are off 5% today as I type, on sizeable volume.


More below the fold.


China Logistics (1589 HK): More Talk On "Change Of Control"