Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Everbright Mandatory Offer for Ying Li Intl Real Estate - Going Cheap

Quiddity Advisors

Event-Driven

Ying Li International Real Estate Ltd / Event-Driven

Ying Li International Real Estate Ltd (YINGLI SP)

The <a href="https://www.smartkarma.com/entities/167" target="_blank" data-smartkarma-citation="entities:167:1">China Everbright (165 HK)</a> Offer for <a href="https://www.smartkarma.com/entities/5896" target="_blank" data-smartkarma-citation="entities:5896:1">Ying Li International Real Estate Ltd (YINGLI SP)</a> has seen the despatch of the <a href="https://links.sgx.com/FileOpen/Ying%20Li_Offeree%20Circular%20Dated%202%20May%202019.ashx?App=Announcement&amp;FileID=557688" target="_blank">Offering Circular</a> and the most notable part is that the Independent Financial Advisor has found the Offer Not Fair and Not Reasonable.<blockquote>Based on our analysis and after having considered carefully the information available to us as at the Latest Practicable Date, overall we are of the view that the financial terms of the Offer are not fair and not reasonable. Accordingly, we advise the Independent Directors to recommend Shareholders to REJECT the Offer.</blockquote>Which leads to the Recommendation of the Independent Directors...<blockquote>The Independent Directors, having considered carefully the terms of the Offer and the advice and recommendation of the IFA in the IFA Letter, concur with the advice and recommendation of the IFA in respect of the Offer. Accordingly, the Independent Directors recommend that Shareholders REJECT the Offer.</blockquote>And that should not be a surprise. One of my conclusions in <a href="https://www.smartkarma.com/insights/everbright-mandatory-offer-for-ying-li-intl-real-estate-going-cheap" target="_blank" data-smartkarma-citation="insights:29050">Everbright Mandatory Offer for Ying Li Intl Real Estate - Going Cheap</a> when the deal was announced was "There is every chance that an IFA will suggest the takeover price is neither fair nor reasonable."The ridiculously low level of the Offer was discussed in that previous insight four weeks ago. The Founder/CEO Mr. Fang Ming had sold his remaining 30.0% of the Company at a level which was equivalent to 0.35x trailing book value per share. There is no good reason I could see why he did so. Real estate investors are not in the habit of letting their assets go at such a deep discount to NAV. And given that the firm's biggest asset is one which is co-invested with and managed by the Acquirer, it looked stranger. Furthermore, Everbright bought into this developer and has held the shares for five years, with the additional funds being invested in joint venture developments, but notably invested at a MUCH higher price/NAV. Everbright did so knowing what was in the development pipeline for the next several years and has contributed to the development pipeline going forward. So why 0.35x trailing book?I still do not know. It still boggles the mind. <hr>The <a href="https://www.smartkarma.com/insights/quiddity-singapore-m-a-guide-2019" target="_blank">Quiddity Singapore M&amp;A Guide 2019</a> is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Singapore M&amp;A landscape. Others in the series to date are <a href="https://www.smartkarma.com/insights/quiddity-hong-kong-m-a-guide-2019" target="_blank">Hong Kong</a>, and <a href="https://www.smartkarma.com/insights/quiddity-japan-m-a-guide-2019" target="_blank">Japan</a>. Watch for more soon!

The China Everbright (165 HK) Offer for Ying Li International Real Estate Ltd (YINGLI SP) has seen the despatch of the Offering Circular and the most notable part is that the Independent Financial Advisor has found the Offer Not Fair and Not Reasonable.Based on our analysis and after having considered carefully the information available to us as at the Latest Practicable Date, overall we are of the view that the financial terms of the Offer are not fair and not reasonable. Accordingly, we advise the Independent Directors to recommend Shareholders to REJECT the Offer.Which leads to the Recommendation of the Independent Directors...The Independent Directors, having considered carefully the terms of the Offer and the advice and recommendation of the IFA in the IFA Letter, concur with the advice and recommendation of the IFA in respect of the Offer. Accordingly, the Independent Directors recommend that Shareholders REJECT the Offer.And that should not be a surprise. One of my conclusions in Everbright Mandatory Offer for Ying Li Intl Real Estate - Going Cheap when the deal was announced was "There is every chance that an IFA will suggest the takeover price is neither fair nor reasonable."The ridiculously low level of the Offer was discussed in that previous insight four weeks ago. The Founder/CEO Mr. Fang Ming had sold his remaining 30.0% of the Company at a level which was equivalent to 0.35x trailing book value per share. There is no good reason I could see why he did so. Real estate investors are not in the habit of letting their assets go at such a deep discount to NAV. And given that the firm's biggest asset is one which is co-invested with and managed by the Acquirer, it looked stranger. Furthermore, Everbright bought into this developer and has held the shares for five years, with the additional funds being invested in joint venture developments, but notably invested at a MUCH higher price/NAV. Everbright did so knowing what was in the development pipeline for the next several years and has contributed to the development pipeline going forward. So why 0.35x trailing book?I still do not know. It still boggles the mind. The Quiddity Singapore M&amp;A Guide 2019 is now published with guidelines to the relevant rules, regulations, documentation, and pointers to the Singapore M&amp;A landscape. Others in the series to date are Hong Kong, and Japan. Watch for more soon!

Ying Li Offer Deemed Not Fair Not Reasonable