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

Healius: Australian Clinical Labs' Opportunistic Merger Proposal

Quiddity Advisors

Event-Driven

<span id="m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-10" class="m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-gr_ m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-gr_10 m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-gr-alert m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-gr_spell m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-gr_inline_cards m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-gr_disable_anim_appear m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-ContextualSpelling m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-ins-del m_7823671801930075664m_5284045169874799227gmail-m_-6425279617474046066m_3763598446491618263m_361403515435436896gmail-multiReplace"><a href="https://www.smartkarma.com/entities/6296" target="_blank" data-smartkarma-citation="entities:6296:1" rel="noopener">Healius (HLS AU)</a> (until <a href="https://www.asx.com.au/asxpdf/20181205/pdf/440z5s9f30tgjf.pdf" target="_blank" rel="noopener">last month</a> known as Primary Health Care Limited), a leading owner of general practice clinics and pathology centres in Australia, <a href="https://www.asx.com.au/asxpdf/20190103/pdf/441n7r99jdl9fs.pdf" target="_blank" rel="noopener">announced</a> an unsolicited and conditional proposal (including DD) from <a href="https://www.smartkarma.com/entities/669" target="_blank" data-smartkarma-citation="entities:669:1" rel="noopener">Jangho Group Co Ltd A (601886 CH)</a> at A$3.25/share (~10x FY19 EV/EBITDA) in a A$2.0bn deal.  Jangho currently holds a 15.9% stake in Healius and has been on the shareholder register for two years.
The Offer price translates to a 33.2% premium to the undisturbed price but below the 12-month high of A$4.09 in March 2018. Optically and when referenced to closest peer <a href="https://www.smartkarma.com/entities/14466" target="_blank" data-smartkarma-citation="entities:14466:1" rel="noopener">Sonic Healthcare (SHL AU)</a>, the offer price appears light.
Reflecting the long laundry list of conditions attached to this indicative offer, such as securing debt financing and various regulatory approvals in China and Australia, notably data security, this indicative deal is trading wide at a gross/annualized spread of 25%/47%, assuming a deal completion date in early August.
This proposal does, however, indicate Healius was probably oversold.
This morning, Healius' board <a href="https://www.asx.com.au/asxpdf/20190107/pdf/441q12jplcykk8.pdf" target="_blank" rel="noopener">rejected</a> the proposal as it was considered opportunistic and fundamentally undervalued the company.

Healius (HLS AU) (until last month known as Primary Health Care Limited), a leading owner of general practice clinics and pathology centres in Australia, announced an unsolicited and conditional proposal (including DD) from Jangho Group Co Ltd A (601886 CH) at A$3.25/share (~10x FY19 EV/EBITDA) in a A$2.0bn deal.  Jangho currently holds a 15.9% stake in Healius and has been on the shareholder register for two years.
The Offer price translates to a 33.2% premium to the undisturbed price but below the 12-month high of A$4.09 in March 2018. Optically and when referenced to closest peer Sonic Healthcare (SHL AU), the offer price appears light.
Reflecting the long laundry list of conditions attached to this indicative offer, such as securing debt financing and various regulatory approvals in China and Australia, notably data security, this indicative deal is trading wide at a gross/annualized spread of 25%/47%, assuming a deal completion date in early August.
This proposal does, however, indicate Healius was probably oversold.
This morning, Healius' board rejected the proposal as it was considered opportunistic and fundamentally undervalued the company.

Healius

Healius And The (Likely) First Salvo