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

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/pepsico-inc" target="_blank" data-smartkarma-citation="entities:4967:1" rel="noopener">Pepsico Inc (PEP US)</a> is <a href="https://www.pioneerfoods.co.za/wp-content/uploads/FIA.pdf" target="_blank" rel="noopener">offering</a> shareholders of <a href="https://www.smartkarma.com/entities/pioneer-foods-group-ltd" target="_blank" data-smartkarma-citation="entities:27687:1" rel="noopener">Pioneer Foods Group Ltd (PFG SJ)</a> ZAR110/share, a premium of ~ 56% to the undisturbed price, by way of a Scheme of Arrangement. A dividend upwards of ZAR2.19/share may be paid should the implementation of the Scheme occur after the 30 September 2019, which appears likely.
52.85% of PFG's register has given an irrevocable to vote in favour of the Scheme. This includes Zeder Investments, Pioneer’s largest shareholder with 28.23%. <a href="https://www.smartkarma.com/entities/psg-group-ltd" target="_blank" data-smartkarma-citation="entities:27693:1" rel="noopener">PSG Group Ltd (PSG SJ)</a>, Zeder's largest shareholder with 43.8%, has in turn given an irrevocable to vote in favour of Zeder's special resolution to sell its stake in PFG. Zeder has been the largest shareholder in PFG for almost 13 years.
The transaction is subject to various regulatory approvals, and as PFG exports to more than 80 countries, this includes competition authorities.
PFG, whose well-known brands/products include Weet-Bix cereal, Liqui Fruit juice and Sasko bread, is the latest South African consumer goods company to be subject to a takeover after the Milco SA consortium was recently <a href="https://webcache.googleusercontent.com/search?q=cache:vuBIpSlvWmYJ:https://www.foodbusinessafrica.com/2019/07/20/milco-sa-gets-commission-nod-to-acquire-clover-industries/+&amp;cd=2&amp;hl=en&amp;ct=clnk&amp;gl=hk" target="_blank" rel="noopener">given</a> conditional approval from the Competition Commission to acquire Clover Industries.  
PFG, like other domestic food producers, has struggled in the face of a decline in consumer spending and the weather-related impact on maize (resulting in volume declines in maize and cereals) which PFG uses in many of its products - constraining revenue growth. Consensus estimates forecast a decline of 9% in earnings for FY19E (Sept-end). PFG <a href="https://www.pioneerfoods.co.za/2019/05/20/pioneer-foods-interim-financial-results-for-the-period-ended-march-2019/" target="_blank" rel="noopener">reported</a> first-half (to March 2019) earnings of  ZAR512.1mn, a 17.7% decline yoy.
If you eye-balling PFG's share price performance, there is a tinge of opportunism to PepsiCo's Offer. But with more than half the register in favour, including a long-term shareholder, I would not bet against the deal completing.

Pepsico Inc (PEP US) is offering shareholders of Pioneer Foods Group Ltd (PFG SJ) ZAR110/share, a premium of ~ 56% to the undisturbed price, by way of a Scheme of Arrangement. A dividend upwards of ZAR2.19/share may be paid should the implementation of the Scheme occur after the 30 September 2019, which appears likely.
52.85% of PFG's register has given an irrevocable to vote in favour of the Scheme. This includes Zeder Investments, Pioneer’s largest shareholder with 28.23%. PSG Group Ltd (PSG SJ), Zeder's largest shareholder with 43.8%, has in turn given an irrevocable to vote in favour of Zeder's special resolution to sell its stake in PFG. Zeder has been the largest shareholder in PFG for almost 13 years.
The transaction is subject to various regulatory approvals, and as PFG exports to more than 80 countries, this includes competition authorities.
PFG, whose well-known brands/products include Weet-Bix cereal, Liqui Fruit juice and Sasko bread, is the latest South African consumer goods company to be subject to a takeover after the Milco SA consortium was recently given conditional approval from the Competition Commission to acquire Clover Industries.  
PFG, like other domestic food producers, has struggled in the face of a decline in consumer spending and the weather-related impact on maize (resulting in volume declines in maize and cereals) which PFG uses in many of its products - constraining revenue growth. Consensus estimates forecast a decline of 9% in earnings for FY19E (Sept-end). PFG reported first-half (to March 2019) earnings of  ZAR512.1mn, a 17.7% decline yoy.
If you eye-balling PFG's share price performance, there is a tinge of opportunism to PepsiCo's Offer. But with more than half the register in favour, including a long-term shareholder, I would not bet against the deal completing.

NTT (Nippon Telegraph & Telephone) (9432 JP)

PepsiCo/Pioneer Foods: It's All About Growth