IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

IClick’s Privatisation Bid from PAG and Oasis

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Event-Driven

iClick Interactive Asia Group / Event-Driven

<a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> is a leading enterprise and marketing cloud platform in China. It is a platinum provider to <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> in social advertising and provides one-stop solutions in user acquisition and engagement.On 18 September, iClick announced a second non-binding privatisation proposal from Infinity Equity Management. The bid of $7.50 in cash per ADS represents a premium of 32.7% to the undisturbed price of $5.65 (on 23 September prior to the first proposal from PAG and Oasis). As a reminder, on 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management of $6.75 in cash per ADS. Infinity’s offer represents an 11.1% bump to the offer from PAG and Oasis.  As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Infinity has not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a>. Mr Hsieh and Mr Tang together represent around 62% of voting interests. Borrowing a page from PAG and Oasis’ playbook, Infinity’s letter to the board mentions an intention to acquire all the shares other than those “other than management owned shares and those existing shareholders of the Company who elect to roll over.” The wording suggests that Infinity is vying with PAG and Oasis to get the upper hand in discussions with the co-founders and Baozun. In <a href="https://www.smartkarma.com/insights/iclick-s-privatisation-bid-from-pag-and-oasis" target="_blank" data-smartkarma-citation="insights:58109" rel="noopener">IClick’s Privatisation Bid from PAG and Oasis</a>, we stated that the PAG and Oasis offer is unattractive in comparison to historical share prices and multiples. We also noted that the PAG and Oasis offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities.<div class="content-highlight">While we did not expect a competing bid, Infinity’s offer while providing a bump to PAG and Oasis' offer still leaves minorities short-changed. Nevertheless, the emergence of two bidders suggests that there is a decent chance of another bidding round. At the last close of $6.50 per ADS, the gross spread to the Infinity offer price is 15.4%.  </div>

iClick Interactive Asia Group (ICLK US) is a leading enterprise and marketing cloud platform in China. It is a platinum provider to Tencent (700 HK) in social advertising and provides one-stop solutions in user acquisition and engagement.On 18 September, iClick announced a second non-binding privatisation proposal from Infinity Equity Management. The bid of $7.50 in cash per ADS represents a premium of 32.7% to the undisturbed price of $5.65 (on 23 September prior to the first proposal from PAG and Oasis). As a reminder, on 24 September, iClick announced a non-binding privatisation proposal from PAG and Oasis Management of $6.75 in cash per ADS. Infinity’s offer represents an 11.1% bump to the offer from PAG and Oasis.  As iClick is incorporated in the Cayman Islands, for the privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. Infinity has not disclosed a shareholding. iClick’s three largest shareholders are Wing Hong Sammy Hsieh (co-founder and Chairman), Jian Tang (co-founder and CEO) and Baozun Inc. (BZUN US). Mr Hsieh and Mr Tang together represent around 62% of voting interests. Borrowing a page from PAG and Oasis’ playbook, Infinity’s letter to the board mentions an intention to acquire all the shares other than those “other than management owned shares and those existing shareholders of the Company who elect to roll over.” The wording suggests that Infinity is vying with PAG and Oasis to get the upper hand in discussions with the co-founders and Baozun. In IClick’s Privatisation Bid from PAG and Oasis, we stated that the PAG and Oasis offer is unattractive in comparison to historical share prices and multiples. We also noted that the PAG and Oasis offer is designed to take advantage of the sell-off in Chinese tech names by enriching insiders at the expense of minorities.While we did not expect a competing bid, Infinity’s offer while providing a bump to PAG and Oasis' offer still leaves minorities short-changed. Nevertheless, the emergence of two bidders suggests that there is a decent chance of another bidding round. At the last close of $6.50 per ADS, the gross spread to the Infinity offer price is 15.4%.  

Joy Spreader Interactive Technology (6988 HK)

IClick’s Improved Privatisation Bid from a Second Suitor