Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst with 10+ years experience in fundamental and event-driven research.

On Smartkarma, I mainly publish insights on index flow events. This includes predicting regular and intra-review index changes and formulating market-neutral trading strategies based on flow catalysts. 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

With the shares down more than 95% from highs, on 28th February 2020, long-suffering ASX-listed <a href="https://www.smartkarma.com/entities/liquefied-natural-gas-ltd" target="_blank" data-smartkarma-citation="entities:9057:1" rel="noopener">Liquefied Natural Gas (LNG AU)</a> (LNGL) announced they had entered into a Bid Implementation Agreement with Singapore-based private company LNG9 PTE LTD (LNG9). 
LNG9 will launch an all-cash Off-market Takeover Bid to acquire all the shares of LNGL (including all shares underlying the outstanding LNGL sponsored ADRs) at an Offer Price of US$0.13/share (or the Australian dollar equivalent- A$0.198/share based on exchange rate on 27th Feb).  The Deal values LNGL at a market cap of approximately US$75mn.
That is a bit less than half the value of the equity raised in early 2015 when the company sold new shares to fund its big push to a FID. Almost five years later and LNG prices are a lot lower, and there is still no FID.
The Offer proposed is conditional on a 90%-minimum acceptance threshold and receiving regulatory approvals. The Tender Offer period is currently expected to be open from 2nd April to 3rd May. 
LNGL's shares are currently trading at A$0.14, with 41% upside to the Offer Price. That is a VERY big spread and indicates how much risk there is in this.
In this insight, we take a look at the reasons behind this wide spread.

With the shares down more than 95% from highs, on 28th February 2020, long-suffering ASX-listed Liquefied Natural Gas (LNG AU) (LNGL) announced they had entered into a Bid Implementation Agreement with Singapore-based private company LNG9 PTE LTD (LNG9). 
LNG9 will launch an all-cash Off-market Takeover Bid to acquire all the shares of LNGL (including all shares underlying the outstanding LNGL sponsored ADRs) at an Offer Price of US$0.13/share (or the Australian dollar equivalent- A$0.198/share based on exchange rate on 27th Feb).  The Deal values LNGL at a market cap of approximately US$75mn.
That is a bit less than half the value of the equity raised in early 2015 when the company sold new shares to fund its big push to a FID. Almost five years later and LNG prices are a lot lower, and there is still no FID.
The Offer proposed is conditional on a 90%-minimum acceptance threshold and receiving regulatory approvals. The Tender Offer period is currently expected to be open from 2nd April to 3rd May. 
LNGL's shares are currently trading at A$0.14, with 41% upside to the Offer Price. That is a VERY big spread and indicates how much risk there is in this.
In this insight, we take a look at the reasons behind this wide spread. 

Liquefied Natural Gas

LNGL (LNG AU): An Unhappy Ending