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

Maanshan's Offer Likely To Turn Unconditional

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/maanshan-iron-steel-h" target="_blank" data-smartkarma-citation="entities:204:1" rel="noopener">Maanshan Iron &amp; Steel H (323 HK)</a>'s Composite Doc has been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0930/ltn20190930111.pdf" target="_blank" rel="noopener">issued</a>. The First Closing Date is the 29th October, and the Offer will lapse if not unconditional by this date.
To recap, Maanshan <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0602/ltn20190602057.pdf" target="_blank" rel="noopener">announced</a> in June of this year that Anhui SASAC intended to transfer 51% of the equity interest held by it in Magang Group to China Baowu for nil consideration. The transfer was subject to various PRC regulatory approvals, and <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0919/ltn20190919369.pdf" target="_blank" rel="noopener">completed</a> on the 19 September. 
The transfer triggered a conditional Mandatory General Offer (MGO) for H shareholders at $2.97/share, a 1.37% premium to last close. The MGO is conditional on 343.87mn H shares tendering or ~20% of total H shares outstanding and 4.46% of total A&amp;H shares, which together would give China Baowu 50% of Maanshan.
Maanshan has traded at or below terms, on average, on 35 days of the 49 days traded since the July announcement. 822mn shares have changed hands, 502mn on days when trading at or below terms.
Arb players are active, either on a potential re-rate over the US/China trade dispute, or simply to tender if the dispute continues.  I'm still not sold there are sufficient shares in arb hands for the MGO to be met. What looks more interesting is Maanshan against <a href="https://www.smartkarma.com/entities/angang-steel-co-ltd-h" target="_blank" data-smartkarma-citation="entities:203:1" rel="noopener">Angang Steel Co Ltd (H) (347 HK)</a>.

Maanshan Iron &amp; Steel H (323 HK)'s Composite Doc has been issued. The First Closing Date is the 29th October, and the Offer will lapse if not unconditional by this date.
To recap, Maanshan announced in June of this year that Anhui SASAC intended to transfer 51% of the equity interest held by it in Magang Group to China Baowu for nil consideration. The transfer was subject to various PRC regulatory approvals, and completed on the 19 September. 
The transfer triggered a conditional Mandatory General Offer (MGO) for H shareholders at $2.97/share, a 1.37% premium to last close. The MGO is conditional on 343.87mn H shares tendering or ~20% of total H shares outstanding and 4.46% of total A&amp;H shares, which together would give China Baowu 50% of Maanshan.
Maanshan has traded at or below terms, on average, on 35 days of the 49 days traded since the July announcement. 822mn shares have changed hands, 502mn on days when trading at or below terms.
Arb players are active, either on a potential re-rate over the US/China trade dispute, or simply to tender if the dispute continues.  I'm still not sold there are sufficient shares in arb hands for the MGO to be met. What looks more interesting is Maanshan against Angang Steel Co Ltd (H) (347 HK).

The Magang/Angang Pair Trade Is Preferable To The MGO