Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

SSNC Swoops On GBST As Bravura Ponders Next Move

Quiddity Advisors

Event-Driven

There's a new bid for GBST.FNZ finally comes up with something into which one can sink one's teeth.<h2>The Background</h2>In early-mid April, <a href="https://www.smartkarma.com/entities/bravura-solutions" target="_blank" data-smartkarma-citation="entities:23648:1" rel="noopener">Bravura Solutions (BVS AU)</a> first approached <a href="https://www.smartkarma.com/entities/gbst-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20526:1" rel="noopener">GBST Holdings (GBT AU)</a> which was then trading just below A$2.00 (after bouncing off a February low of A$1.20) and proposed a deal at A$2.50. At the time, GBST announced it "has <a href="https://www.asx.com.au/asxpdf/20190628/pdf/4466rsbh1r8qpr.pdf" target="_blank" rel="noopener">now received</a> other non-binding confidential competing proposals to acquire 100% of the ordinary shares of GBST via cash offers at a price higher than $3.00 per share."Bravura lifted its indicative offer to A$2.72 in mid-June and then A$3.00, but on July 1, GBST <a href="https://www.asx.com.au/asxpdf/20190701/pdf/4467x3qxqvh955.pdf" target="_blank" rel="noopener">announced</a> a non-binding Indicative Offer of $3.25/share (cash) from <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">SS&amp;C Technologies (SSNC US)</a> by way of a Scheme at a 64.6% premium to the closing price on the 11 April, which was when the Bravura news first broke. As discovered a couple of days later, FNZ Group had made a non-binding indicative offer of A$3.15 on June 28th, but on July 3rd, SS&amp;C <a href="https://www.asx.com.au/asxpdf/20190703/pdf/446bp1gb6dcm6z.pdf" target="_blank" rel="noopener">upped their bid</a> to A$3.60 to combat a non-binding offer of A$3.50 from FNZ. A bit more than a week later, the AFR <a href="https://www.afr.com/street-talk/bravura-bunker-mulls-one-more-roll-of-the-dice-20190710-p525s1" target="_blank" rel="noopener">reported</a> that Bravura might have another go. A couple of days after that, FNZ put in a <a href="https://www.asx.com.au/asxpdf/20190708/pdf/446g373tr50mxh.pdf" target="_blank" rel="noopener">bid</a> at A$3.65 but the board of GBST maintained its exclusive due diligence period with SS&amp;C and <a href="https://www.asx.com.au/asxpdf/20190716/pdf/446mx2nhhdkdvj.pdf" target="_blank" rel="noopener">released</a> a Process and Exclusivity Deed on the 16th of July. As <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> wrote in a discussion point then, "GBST has sided with SSNC on account of the scope of DD, the potential impact on GBST's commercial operations should DD be granted, and the terms and size of the break fee." FNZ took it the Exclusivity Deed to the Takeover Panel and a few days later the Takeovers Panel <a href="https://www.asx.com.au/asxpdf/20190716/pdf/446n93mt9fhhrb.pdf" target="_blank" rel="noopener">declined</a> to conduct proceedings to suspend the SS&amp;C exclusive DD, finding that while GBST's method was slightly not conventional, it was not unacceptable. <h2>Newer News</h2>On the 25th of July prior to the open of trading, GBST <a href="https://www.asx.com.au/asxpdf/20190725/pdf/446vxb5hg8qhdt.pdf" target="_blank" rel="noopener">announced</a> a trading halt. On the morning of the 26th, GBST made an <a href="https://www.asx.com.au/asxpdf/20190726/pdf/446x61kdt8dsmd.pdf" target="_blank" rel="noopener">announcement</a> which flabbergasted even those of us who have been around the block. On the 24th after the close, FNZ made an A$4.00 offer which was good until 8pm on the 25th. That was a day or so (until 8pm on 25 July) for the board to respond. That bid was conditional on GBST entering into a Scheme Implementation Deed, without FNZ due diligence, and the Board of GBST determined (after receiving professional advice) that "entering into the SID in the form provided by FNZ would result in an unacceptable level of transaction and other risk for the company and its shareholders." <blockquote>
Despite further attempts to engage in good faith with FNZ, GBST was informed at 1:22 this morning that the FNZ $4.00 proposal had expired, but had been replaced with a new proposal on similar terms at A$3.95 per share ("FNZ $3.95 Proposal"), which was this time expressed to be capable of acceptance until 3.00am (AEST) on Friday, 26 July 2019, after which point it would be automatically withdrawn.
GBST was then informed at approximately 3.10am this morning that the FNZ $3.95 Proposal had expired, but had been replaced with a new proposal on similar terms at A$3.90 per share ("FNZ $3.90 Proposal") which was this time expressed to be capable of acceptance until 9.00am (AEST) on Friday, 26 July 2019, after which it would be automatically withdrawn. 
As the FNZ $3.90 Proposal remained subject to terms which would result in an unacceptable level of risk for the company and its shareholders as well as an unrealistic engagement timetable, the GBST Board has formed the view that the proposal from FNZ is one that is effectively incapable of being accepted.   <a href="https://www.asx.com.au/asxpdf/20190726/pdf/446x61kdt8dsmd.pdf" target="_blank" rel="noopener">GBST filing 26 July 2019</a>
</blockquote>That was 10am. By 2am there was a Trading Pause then a few minutes later a Trading Halt pending more information. This morning GBST <a href="https://www.asx.com.au/asxpdf/20190729/pdf/446ym31fhjy5w3.pdf" target="_blank" rel="noopener">announced</a> that it had entered into a "binding" Scheme Implementation Deed with FNZ Group at A$3.85/share.  The Board unanimously recommends.That is now a 94% premium to the April 11th undisturbed price and a 106+% premium to the 1-month VWAP as of then.The shares today traded through terms all day long. <hr>Quiddity's new <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:29174" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Australia M&amp;A landscape. There are several others in the <a href="https://www.smartkarma.com/search?q=Quiddity%20M%26A" target="_blank" rel="noopener">series</a>, and watch for more to come.

There's a new bid for GBST.FNZ finally comes up with something into which one can sink one's teeth.The BackgroundIn early-mid April, Bravura Solutions (BVS AU) first approached GBST Holdings (GBT AU) which was then trading just below A$2.00 (after bouncing off a February low of A$1.20) and proposed a deal at A$2.50. At the time, GBST announced it "has now received other non-binding confidential competing proposals to acquire 100% of the ordinary shares of GBST via cash offers at a price higher than $3.00 per share."Bravura lifted its indicative offer to A$2.72 in mid-June and then A$3.00, but on July 1, GBST announced a non-binding Indicative Offer of $3.25/share (cash) from SS&amp;C Technologies (SSNC US) by way of a Scheme at a 64.6% premium to the closing price on the 11 April, which was when the Bravura news first broke. As discovered a couple of days later, FNZ Group had made a non-binding indicative offer of A$3.15 on June 28th, but on July 3rd, SS&amp;C upped their bid to A$3.60 to combat a non-binding offer of A$3.50 from FNZ. A bit more than a week later, the AFR reported that Bravura might have another go. A couple of days after that, FNZ put in a bid at A$3.65 but the board of GBST maintained its exclusive due diligence period with SS&amp;C and released a Process and Exclusivity Deed on the 16th of July. As David Blennerhassett wrote in a discussion point then, "GBST has sided with SSNC on account of the scope of DD, the potential impact on GBST's commercial operations should DD be granted, and the terms and size of the break fee." FNZ took it the Exclusivity Deed to the Takeover Panel and a few days later the Takeovers Panel declined to conduct proceedings to suspend the SS&amp;C exclusive DD, finding that while GBST's method was slightly not conventional, it was not unacceptable. Newer NewsOn the 25th of July prior to the open of trading, GBST announced a trading halt. On the morning of the 26th, GBST made an announcement which flabbergasted even those of us who have been around the block. On the 24th after the close, FNZ made an A$4.00 offer which was good until 8pm on the 25th. That was a day or so (until 8pm on 25 July) for the board to respond. That bid was conditional on GBST entering into a Scheme Implementation Deed, without FNZ due diligence, and the Board of GBST determined (after receiving professional advice) that "entering into the SID in the form provided by FNZ would result in an unacceptable level of transaction and other risk for the company and its shareholders." 
Despite further attempts to engage in good faith with FNZ, GBST was informed at 1:22 this morning that the FNZ $4.00 proposal had expired, but had been replaced with a new proposal on similar terms at A$3.95 per share ("FNZ $3.95 Proposal"), which was this time expressed to be capable of acceptance until 3.00am (AEST) on Friday, 26 July 2019, after which point it would be automatically withdrawn.
GBST was then informed at approximately 3.10am this morning that the FNZ $3.95 Proposal had expired, but had been replaced with a new proposal on similar terms at A$3.90 per share ("FNZ $3.90 Proposal") which was this time expressed to be capable of acceptance until 9.00am (AEST) on Friday, 26 July 2019, after which it would be automatically withdrawn. 
As the FNZ $3.90 Proposal remained subject to terms which would result in an unacceptable level of risk for the company and its shareholders as well as an unrealistic engagement timetable, the GBST Board has formed the view that the proposal from FNZ is one that is effectively incapable of being accepted.   GBST filing 26 July 2019
That was 10am. By 2am there was a Trading Pause then a few minutes later a Trading Halt pending more information. This morning GBST announced that it had entered into a "binding" Scheme Implementation Deed with FNZ Group at A$3.85/share.  The Board unanimously recommends.That is now a 94% premium to the April 11th undisturbed price and a 106+% premium to the 1-month VWAP as of then.The shares today traded through terms all day long. Quiddity's new Quiddity Australia M&amp;A Guide 2019 is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Australia M&amp;A landscape. There are several others in the series, and watch for more to come.

FNZ Deal for GBST Finally In, and the Market Expects More Already