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

Will the Chinese Government Rescue Soho China (Potential Write Down of Assets)?

SOHO China (410 HK): Blackstone Deal Potentially Back On As Pan Shiyi Goes "Altruistic"

SOHO China (410 HK): At Least There Is Dialogue

Quiddity Advisors

Event-Driven

Perhaps my last <a href="https://www.smartkarma.com/compose/insight/57498/SOHO%20China%20(410%20HK):%20At%20Least%20There%20Is%20Dialogue.%20Read%20more:%20https:/skr.ma/2qN2b" target="_blank" rel="noopener">insight</a> should have been titled: SOHO China (410 HK): At Least There WAS Dialogue. 
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On the 6 September, <a href="https://www.smartkarma.com/entities/soho-china-ltd" target="_blank" data-smartkarma-citation="entities:4123:1" rel="noopener">Soho China Ltd (410 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0906/2021090600341.pdf" target="_blank" rel="noopener">announced</a> its SAMR application was still ongoing, and that the "Offeror has received further requests to provide additional information for the regulators’ review. It is uncertain when the review process will be completed."
Four days later, and in "light of the lack of sufficient progress in satisfying the Pre-Conditions" - the Offer was conditional on approval from China's competition authorities -  Blackstone and Pan Shiyi <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0910/2021091000324.pdf" target="_blank" rel="noopener">pulled</a> the transaction.
With over three and half months left on the clock to the expiry of the long-stop date... what happened?
Evidently, Beijing tapped Pan Shiyi on the shoulder that this deal is not going to happen, and all parties saved face by simply pulling the transaction.
But was the decision predicated on the ensuing backlash from Pan Shiyi son's <a href="https://skr.ma/nQLF3" target="_blank" rel="noopener">comments</a> last year?
Or has Pan Shiyi fallen victim to China's common-prosperity strategy, which calls for China's citizens to share in the opportunity to be wealthy?
From the onset, this property deal faced domestic online criticism that Pan Shiyi and his wife Zhang Xin were cashing out of the business they set up over two decades ago, and taking the proceeds offshore. Perhaps not the poster children for this shared prosperity drive.
So what now - how do the Pans move forward?
The right trade would appear to one of selling their assets piecemeal, then paying out dividends. But that scenario would see cash returned to the vendor anyway, which only serves to circumvent this failed offer. 
The big question now is where this will trade on Monday, and who - apart from those who are short - will be buying from arb investors now that the company is certifiably toxic.
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More below the fold.

Perhaps my last insight should have been titled: SOHO China (410 HK): At Least There WAS Dialogue. 

On the 6 September, Soho China Ltd (410 HK) announced its SAMR application was still ongoing, and that the "Offeror has received further requests to provide additional information for the regulators’ review. It is uncertain when the review process will be completed."
Four days later, and in "light of the lack of sufficient progress in satisfying the Pre-Conditions" - the Offer was conditional on approval from China's competition authorities -  Blackstone and Pan Shiyi pulled the transaction.
With over three and half months left on the clock to the expiry of the long-stop date... what happened?
Evidently, Beijing tapped Pan Shiyi on the shoulder that this deal is not going to happen, and all parties saved face by simply pulling the transaction.
But was the decision predicated on the ensuing backlash from Pan Shiyi son's comments last year?
Or has Pan Shiyi fallen victim to China's common-prosperity strategy, which calls for China's citizens to share in the opportunity to be wealthy?
From the onset, this property deal faced domestic online criticism that Pan Shiyi and his wife Zhang Xin were cashing out of the business they set up over two decades ago, and taking the proceeds offshore. Perhaps not the poster children for this shared prosperity drive.
So what now - how do the Pans move forward?
The right trade would appear to one of selling their assets piecemeal, then paying out dividends. But that scenario would see cash returned to the vendor anyway, which only serves to circumvent this failed offer. 
The big question now is where this will trade on Monday, and who - apart from those who are short - will be buying from arb investors now that the company is certifiably toxic.

More below the fold. 

SOHO China (410 HK): The Tap On The Shoulder