CEO, Manalo LLP

Roderick Manlo

Manalo LLP

We provide event driven research services to hedge fund managers and institutional investors that cover select definitive and pre-announced M&A deals, focusing on identifying and analysing the key upside and downside risks to a particular transaction. We primarily analyse $billion+ takeovers or mergers of publicly-traded European targets, but also look at deals globally to assess when there is a key European angle or aspect that can influence the deal outcome.

With over 16 years’ experience in risk arbitrage and investment banking, we specialise in providing research and advisory services on all facets of risk arbitrage, with particular expertise in:

- Cross-Border M&A
- Hostile Takeovers
- Local Takeover Codes
- Antitrust & Competition
- Financial Valuation
- Shareholder Vote Analysis
- Impacts of Precedent Transactions
- Risk Arbitrage Trading Strategies

Event-Driven

<p>Syngenta shares have recently stabilised and the stock's performance above CHF 400 was driven by deal updates with regards to antitrust - the companies recently submitted remedies to appease European antitrust regulators and secured approval from Australian antitrust regulators. Fear from risk arbitrage funds has somewhat subsided, and when ChemChina again extended the offer period on 20-Dec-16, to 2-Mar-17, it confirmed that it aims to obtain the remaining outstanding regulatory approvals in 1Q’17. However, deal uncertainty continues to revolve around: 1) the filings and timing with US antitrust regulators, which are still outstanding; 2) speculation of a Sinochem / ChemChina merger, whereby a buyer consortium that is meaningfully altered may re-open CFIUS and require President-elect Trump’s approval; and, 3) China’s appetite to complete the transaction and ability to find a way to back out.</p><p>Our research has explored all of the above risks but this particular piece touches on another perceived hurdle - M&amp;A financing. Financing became an focus after Chinese media reports in October 2016 suggested that state-backed equity investors might not participate in the deal, thus threatening the proposed financing structure. Recently, there has been no meaningful update with regards to debt financing but regardless of any re-financing developments, our lawyers and many other legal advisors have concluded that Citic Bank and HSBC, the bridge financiers, are legally on the hook under Swiss Takeover Law for their bridge loans to finance 100% of the Syngenta acquisition. This holds true despite whatever refinancing arrangements are agreed between ChemChina and other parties.</p>

Syngenta shares have recently stabilised and the stock's performance above CHF 400 was driven by deal updates with regards to antitrust - the companies recently submitted remedies to appease European antitrust regulators and secured approval from Australian antitrust regulators. Fear from risk arbitrage funds has somewhat subsided, and when ChemChina again extended the offer period on 20-Dec-16, to 2-Mar-17, it confirmed that it aims to obtain the remaining outstanding regulatory approvals in 1Q’17. However, deal uncertainty continues to revolve around: 1) the filings and timing with US antitrust regulators, which are still outstanding; 2) speculation of a Sinochem / ChemChina merger, whereby a buyer consortium that is meaningfully altered may re-open CFIUS and require President-elect Trump’s approval; and, 3) China’s appetite to complete the transaction and ability to find a way to back out.Our research has explored all of the above risks but this particular piece touches on another perceived hurdle - M&amp;A financing. Financing became an focus after Chinese media reports in October 2016 suggested that state-backed equity investors might not participate in the deal, thus threatening the proposed financing structure. Recently, there has been no meaningful update with regards to debt financing but regardless of any re-financing developments, our lawyers and many other legal advisors have concluded that Citic Bank and HSBC, the bridge financiers, are legally on the hook under Swiss Takeover Law for their bridge loans to finance 100% of the Syngenta acquisition. This holds true despite whatever refinancing arrangements are agreed between ChemChina and other parties.

Syngenta / ChemChina: Committed Financing Requirement Under Swiss Takeover Law

Syngenta AG

Syngenta / ChemChina: Committed Financing Requirement Under Swiss Takeover Law