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

NVL: Furry Profitable After Greencross Offer

Quiddity Advisors

Event-Driven

Australia and New Zealand's largest integrated consumer-facing pet retail and vet services company <a href="https://www.smartkarma.com/entities/18873" target="_blank" data-smartkarma-citation="entities:18873:1">Greencross Ltd (GXL AU)</a> has entered a <a href="https://www.asx.com.au/asxpdf/20181105/pdf/4400grpk8y3y6c.pdf" target="_blank">Scheme Implementation Agreement</a> with TPG to acquire 100% of shares at $5.55/share, a 44.5% premium to the 1-month VWAP (&amp; 34.1% premium to the undisturbed price), which backs out a ~10x FY18 EV/EBITDA and 18x FY18 PER.
A scrip option into an unlisted Holdco, subject to scale back, is also being made available to shareholders. 
Greencross intends to pay a fully franked dividend of A$0.21/share on or shortly before the implementation date of the Scheme. Those shareholders who are able to realise the full benefit of franking credits will receive up to $5.64/share. The Scheme consideration will be reduced by this dividend.
Greencross <a href="https://www.asx.com.au/asxpdf/20181010/pdf/43z3qn9h6p75yj.pdf" target="_blank">announced</a> on the 10 October it had fielded a number of "credible proposals"  resulting in TPG's access to the data room. The share price popped ~18% immediately following this announcement.
TPG knows this company well, having approached management in January 2016, first with a $6.45/share offer, followed in February with a $6.75/share offer - while concurrently taking a 5.92% stake.  Both proposals were rejected.
Although the sales growth for Greencross' integrated stores show promise, as CEO Simon Hickey is quoted in the media, "the world has changed".  Competition in pet retailing has intensified, as reflected in the 25% decline YoY in Greencross' EBITDA in FY18; which will only deepen following Amazon's entrance this year, and specifically the targeting of the pet segment in August.
Management supports the Offer in the absence of a superior proposal and as it is accepting of due diligence here, means the Offer price can't be far off. But my gut is that this looks light and may need a bump to get up.

Australia and New Zealand's largest integrated consumer-facing pet retail and vet services company Greencross Ltd (GXL AU) has entered a Scheme Implementation Agreement with TPG to acquire 100% of shares at $5.55/share, a 44.5% premium to the 1-month VWAP (&amp; 34.1% premium to the undisturbed price), which backs out a ~10x FY18 EV/EBITDA and 18x FY18 PER.
A scrip option into an unlisted Holdco, subject to scale back, is also being made available to shareholders. 
Greencross intends to pay a fully franked dividend of A$0.21/share on or shortly before the implementation date of the Scheme. Those shareholders who are able to realise the full benefit of franking credits will receive up to $5.64/share. The Scheme consideration will be reduced by this dividend.
Greencross announced on the 10 October it had fielded a number of "credible proposals"  resulting in TPG's access to the data room. The share price popped ~18% immediately following this announcement.
TPG knows this company well, having approached management in January 2016, first with a $6.45/share offer, followed in February with a $6.75/share offer - while concurrently taking a 5.92% stake.  Both proposals were rejected.
Although the sales growth for Greencross' integrated stores show promise, as CEO Simon Hickey is quoted in the media, "the world has changed".  Competition in pet retailing has intensified, as reflected in the 25% decline YoY in Greencross' EBITDA in FY18; which will only deepen following Amazon's entrance this year, and specifically the targeting of the pet segment in August.
Management supports the Offer in the absence of a superior proposal and as it is accepting of due diligence here, means the Offer price can't be far off. But my gut is that this looks light and may need a bump to get up.

Greencross Ltd

TPG Throws A Bone To Greencross