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

Ho Bee Ups Stake In Villa World After AVID Lobs An Offer

Quiddity Advisors

Event-Driven

On the 14th March 2019, Australian property developer <a href="https://www.smartkarma.com/entities/1771" target="_blank" data-smartkarma-citation="entities:1771:1" rel="noopener">Villa World Ltd (VLW AU)</a> <a href="https://www.asx.com.au/asxpdf/20190314/pdf/443h7sw2498dvl.pdf" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.asx.com.au/asxpdf/20190314/pdf/443h7sw2498dvl.pdf&amp;source=gmail&amp;ust=1552962168274000&amp;usg=AFQjCNG0RvsgZHE2-rlPDWMKhIl_ucl33g" rel="noopener">announced</a> it had received an unsolicited proposal, by way of a Scheme, from AVID Property Group Australia at an offer price of A$2.23, or a 12% premium to last close. 
The Indicative Offer translated to an LTM PER and P/B of 6.4x and 0.9x. At the time, I didn't believe VLW would want to engage. VLW was (and still is) paying out one of the highest yields among its peers, and with ~21% of the register potentially defending their position - one of which was actively buying - there was likely upside. 
<a href="https://www.smartkarma.com/entities/ho-bee-land-ltd" target="_blank" data-smartkarma-citation="entities:18298:1" rel="noopener">Ho Bee Land Ltd (HOBEE SP)</a> , VLW's largest shareholder and JV partner, responded to AVID's proposal by <a href="https://www.asx.com.au/asxpdf/20190318/pdf/443l6q3xn18719.pdf" target="_blank" rel="noopener">buying</a> 2.2mn shares (~1.8% of shares out) at an average of A$2.04/share - and a high of A$2.18/share - lifting its stake to 9.41% on the same day as the initial Offer. Ho Bee further bumped its stake to 10.45% on the <a href="https://www.asx.com.au/asxpdf/20190327/pdf/443tlkrxm5ww06.pdf" target="_blank" rel="noopener">25 March</a> at an average price of A$2.21; and finally, to 11.62% on the <a href="https://www.asx.com.au/asxpdf/20190417/pdf/444df9tr061cmg.pdf" target="_blank" rel="noopener">15 April</a> at an average of $2.17.
VLW's directors unanimously recommended AVID's <a href="https://www.asx.com.au/asxpdf/20190502/pdf/444s7dl7xkbd6b.pdf" target="_blank" rel="noopener">revised indicative proposal</a> of $2.345/share by way of a Scheme announced on the 2 May. Exclusive due diligence was <a href="https://www.asx.com.au/asxpdf/20190620/pdf/445zc0gd37sb5f.pdf" target="_blank" rel="noopener">extended</a> on the 20 June for a "short time" to facilitate a binding proposal, before <a href="https://www.asx.com.au/asxpdf/20190702/pdf/44699lw3xl6mfk.pdf" target="_blank" rel="noopener">continuing</a> on a non-exclusive basis on the 2 July. 
This has all (finally) culminated in VLW and AVID <a href="https://www.asx.com.au/asxpdf/20190708/pdf/446g44dt35spgy.pdf" target="_blank" rel="noopener">entering</a> into a Scheme Implementation Agreement at A$2.345/share yesterday, which is a 17.8% premium to the unaffected price of $1.99 on 14 March. Any final or special dividend paid on or prior to the implementation of the Scheme will reduce the Offer Price.
An anticipated bump has unfolded and VLW's board unanimously supports the Offer. The question is whether Ho Bee will vote for the Scheme. My bet is they will.
<hr>
Quiddity's new <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:29174" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Australia M&amp;A landscape. There are several others in the <a href="https://www.smartkarma.com/search?q=Quiddity%20M%26A" target="_blank" rel="noopener">series</a>, and watch for more to come.

On the 14th March 2019, Australian property developer Villa World Ltd (VLW AU) announced it had received an unsolicited proposal, by way of a Scheme, from AVID Property Group Australia at an offer price of A$2.23, or a 12% premium to last close. 
The Indicative Offer translated to an LTM PER and P/B of 6.4x and 0.9x. At the time, I didn't believe VLW would want to engage. VLW was (and still is) paying out one of the highest yields among its peers, and with ~21% of the register potentially defending their position - one of which was actively buying - there was likely upside. 
Ho Bee Land Ltd (HOBEE SP) , VLW's largest shareholder and JV partner, responded to AVID's proposal by buying 2.2mn shares (~1.8% of shares out) at an average of A$2.04/share - and a high of A$2.18/share - lifting its stake to 9.41% on the same day as the initial Offer. Ho Bee further bumped its stake to 10.45% on the 25 March at an average price of A$2.21; and finally, to 11.62% on the 15 April at an average of $2.17.
VLW's directors unanimously recommended AVID's revised indicative proposal of $2.345/share by way of a Scheme announced on the 2 May. Exclusive due diligence was extended on the 20 June for a "short time" to facilitate a binding proposal, before continuing on a non-exclusive basis on the 2 July. 
This has all (finally) culminated in VLW and AVID entering into a Scheme Implementation Agreement at A$2.345/share yesterday, which is a 17.8% premium to the unaffected price of $1.99 on 14 March. Any final or special dividend paid on or prior to the implementation of the Scheme will reduce the Offer Price.
An anticipated bump has unfolded and VLW's board unanimously supports the Offer. The question is whether Ho Bee will vote for the Scheme. My bet is they will.

Quiddity's new Quiddity Australia M&amp;A Guide 2019 is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Australia M&amp;A landscape. There are several others in the series, and watch for more to come.

Villa World Ltd

Villa World Greenlights AVID's Offer