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

Scout24 Tender Offer Launched: Price Still Not Quite Full

StubWorld: Naspers Embeds Another Layer Into Tencent

StubWorld: Wharf Under Pressure As Cooling Measures Bite

Quiddity Advisors

Event-Driven

On March 28, 2019, Pulver BidCo GmbH (“Pulver BidCo” or the “Bidder”), a holding company jointly controlled by funds advised by Hellman &amp; Friedman LLC (“Hellman &amp; Friedman” or “H&amp;F”) and affiliates of The Blackstone Group L.P. (“Blackstone”) announced the launch of their Offer for <a href="https://www.smartkarma.com/entities/21629" target="_blank" data-smartkarma-citation="entities:21629:1">Scout24 AG (G24 GR)</a> shares at €46.00/share. The Offer was designed to obtain 50% plus a share but leave the company listed afterward.This was the official launch of the deal which had been proposed in February 5.7% higher than January's foray which was rejected. This was discussed on <a href="https://www.smartkarma.com/home/?share=Quiddity1" target="_blank">Smartkarma</a> at the time in <a href="https://www.smartkarma.com/insights/scout24-tender-offer-launched-price-still-not-quite-full" target="_blank" data-smartkarma-citation="insights:28887">Scout24 Tender Offer Launched: Price Still Not Quite Full</a>. Since the original February announcement all the way through the official offer announcement and beyond, the shares have traded much of the time through the terms, and there have been market noises of approaches to the Bidders to raise the price.On April 10th, the Management Board and Supervisory Board of Scout24 AG, after conducting separate enquiries into the fairness and adequacy of the Offer, <a href="https://www.scout24.com/en/Press-Media/News-Archive/scout24-ag-management-board-and-supervisory-board-of-scout24-ag-recommend-accepting-takeover-offer-of-pulver-bidco-gmbh.aspx" target="_blank">announced</a> they recommended accepting takeover offer of Pulver BidCo GmbH in their "joint reasoned statement" (gemeinsame begründete Stellungnahme) pursuant to section 27 of the German Securities Acquisition and Takeover Act. As such, all members of the Management Board and the Supervisory Board who hold Scout24 shares will accept the takeover offer for all shares held and controlled by them.Yesterday, the bidder produced an <a href="https://scout24-offer.com/download/companies/ma1023/ma1023further/20190430_Scout24_PM_en.pdf" target="_blank">update</a> on the Offer prior to the market open saying, <blockquote>Since the publication of the Offer document, the Bidder has been approached by Scout24 AG shareholders to request an increase in the Offer price. The Bidder hereby confirms that it will not increase the Offer price. [my bold]</blockquote>I had thought the price slightly light in <a href="https://www.smartkarma.com/insights/scout24-tender-offer-launched-price-still-not-quite-full" target="_blank" data-smartkarma-citation="insights:28887">Scout24 Tender Offer Launched: Price Still Not Quite Full</a>. Several days before the announcement of the launch of the Offer, Scout24 had announced record results for 2018 and double-digit growth forecasts for 2019.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/518/original/Screenshot%202019-05-01%20at%206.30.21%20PM.png?1556706640" class="editor-image img-responsive" data-smartkarma-image-id="86518"></figure><div style="text-align: left;" class="content-caption">source: Scout24 announcement</div>This deal, at 24x TTM EBITDA, is at ~17x 2019e EV/EBITDA. Silver Lake bid 20x for ZPG. 17x EV/EBITDA for a company with double digit revenue growth and 50+ EBITDA margins is not an overwhelming price. In March I said that I would be a buyer at €46.01/share for the optionality. There isn't much optionality left.

On March 28, 2019, Pulver BidCo GmbH (“Pulver BidCo” or the “Bidder”), a holding company jointly controlled by funds advised by Hellman &amp; Friedman LLC (“Hellman &amp; Friedman” or “H&amp;F”) and affiliates of The Blackstone Group L.P. (“Blackstone”) announced the launch of their Offer for Scout24 AG (G24 GR) shares at €46.00/share. The Offer was designed to obtain 50% plus a share but leave the company listed afterward.This was the official launch of the deal which had been proposed in February 5.7% higher than January's foray which was rejected. This was discussed on Smartkarma at the time in Scout24 Tender Offer Launched: Price Still Not Quite Full. Since the original February announcement all the way through the official offer announcement and beyond, the shares have traded much of the time through the terms, and there have been market noises of approaches to the Bidders to raise the price.On April 10th, the Management Board and Supervisory Board of Scout24 AG, after conducting separate enquiries into the fairness and adequacy of the Offer, announced they recommended accepting takeover offer of Pulver BidCo GmbH in their "joint reasoned statement" (gemeinsame begründete Stellungnahme) pursuant to section 27 of the German Securities Acquisition and Takeover Act. As such, all members of the Management Board and the Supervisory Board who hold Scout24 shares will accept the takeover offer for all shares held and controlled by them.Yesterday, the bidder produced an update on the Offer prior to the market open saying, Since the publication of the Offer document, the Bidder has been approached by Scout24 AG shareholders to request an increase in the Offer price. The Bidder hereby confirms that it will not increase the Offer price. [my bold]I had thought the price slightly light in Scout24 Tender Offer Launched: Price Still Not Quite Full. Several days before the announcement of the launch of the Offer, Scout24 had announced record results for 2018 and double-digit growth forecasts for 2019.source: Scout24 announcementThis deal, at 24x TTM EBITDA, is at ~17x 2019e EV/EBITDA. Silver Lake bid 20x for ZPG. 17x EV/EBITDA for a company with double digit revenue growth and 50+ EBITDA margins is not an overwhelming price. In March I said that I would be a buyer at €46.01/share for the optionality. There isn't much optionality left.

Scout24 AG

Scout24 Offer Final: Time To Unwind