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

Zhuhai Holdings (908 HK): SGM On The 18 May

Zhuhai Holdings: SOE Offer For Tourist Play

Quiddity Advisors

Event-Driven

Zhuhai Holdings Investment / Event-Driven

<p>On the 21 January 2020, <a href="https://www.smartkarma.com/entities/zhuhai-holdings-investment-group-ltd" target="_blank" data-smartkarma-citation="entities:17863:1" rel="noopener">Zhuhai Holdings Investment (908 HK)</a> (ZHI) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0122/2020012200085.pdf" target="_blank" rel="noopener">announced</a> Longway Services Group Limited (the Offeror and wholly-owned by Zhuhai SASAC), and a 25.73% shareholder of ZHI, had entered into a SPA with <a href="https://www.smartkarma.com/entities/lbs-bina-group-bhd" target="_blank" data-smartkarma-citation="entities:12060:1" rel="noopener">Lbs Bina Group (LBS MK)</a>, to acquire LBS' 5.53% stake in ZHI. The sale price was $1.21/share, a 0.83% premium to last close. Upon the completion of the SPA, the Concert Group (including ZJ Holdings' direct stake of 16.47%) would own 47.95%, up from 42.42%. This would trigger a mandatory conditional cash offer by the Concert Group under Rule 26.1 of the Takeovers Code. The Offer was discussed in <em><a href="https://skr.ma/1eyKn" target="_blank" rel="noopener">Zhuhai Holdings: SOE Offer For Tourist Play</a></em>.</p>
<p>The SPA was completed on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0122/2020012200940.pdf" target="_blank" rel="noopener">22 January</a> and became a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0330/2020033002505.pdf" target="_blank" rel="noopener">mandatory unconditional offer</a> after the Offeror acquired further shares in the market, taking the collective holding above 50%. The Composite Doc was issued on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0417/2020041700077.pdf" target="_blank" rel="noopener">17 April</a> last year, with the IFA saying the Offer was fair and reasonable. The Offer <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0508/2020050801074.pdf" target="_blank" rel="noopener">closed</a> on the 8 May with Zhuhai SASAC controlling 61.5%, and public shareholders holding  21.33%. The public float was restored above 25% on <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0528/2020052800911.pdf" target="_blank" rel="noopener">the 28 May</a>. </p>
<h3><strong>The New News</strong></h3>
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<p>After ZHI's shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0118/2021011800105.pdf" target="_blank" rel="noopener">suspended</a> ahead of trading on the 18 January "<em>pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company</em>". ZHI has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0122/2021012201252.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional privatisation by way of Scheme from Zhuhai SASAC's Longway Services Group.</p>
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<p>The Offer price is HK$3.06/share, a 37.84% premium to last close, a 52.39% premium to the average closing price over the previous 30 trading days, and a life-time high. The Offer price will not be increased. No dividend has been declared, nor is one expected to be declared during the Offer period. </p>
<p>Pre-conditions include signs offs from NDRC, MoC, and SAFE. As an SOE is making the Offer, these approvals should be rubber-stamped. </p>
<p>The shareholding into ZHI remains unchanged since the float was restored last May. Zhuhai SASAC indirectly holds 61.5% of shares out. Scheme shareholders comprise 549.6mn shares or 38.5% of shares out. </p>
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<p>Key Scheme conditions include at least 75% of Independent Scheme Shares voting FOR &amp; not more than 10% of the votes attached to ALL the Independent Scheme Shares against. Therefore the blocking stake is 49.6mn shares, or 3.85% of shares out. No single shareholder has declared such a stake. No irrevocables have been given.</p>
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<p>The headcount test applies as ZHI is Bermuda-incorporated. </p>
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<p>This deal looks done.</p>
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<p>As always, more below the fold. </p>
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On the 21 January 2020, Zhuhai Holdings Investment (908 HK) (ZHI) announced Longway Services Group Limited (the Offeror and wholly-owned by Zhuhai SASAC), and a 25.73% shareholder of ZHI, had entered into a SPA with Lbs Bina Group (LBS MK), to acquire LBS' 5.53% stake in ZHI. The sale price was $1.21/share, a 0.83% premium to last close. Upon the completion of the SPA, the Concert Group (including ZJ Holdings' direct stake of 16.47%) would own 47.95%, up from 42.42%. This would trigger a mandatory conditional cash offer by the Concert Group under Rule 26.1 of the Takeovers Code. The Offer was discussed in Zhuhai Holdings: SOE Offer For Tourist Play.
The SPA was completed on the 22 January and became a mandatory unconditional offer after the Offeror acquired further shares in the market, taking the collective holding above 50%. The Composite Doc was issued on the 17 April last year, with the IFA saying the Offer was fair and reasonable. The Offer closed on the 8 May with Zhuhai SASAC controlling 61.5%, and public shareholders holding  21.33%. The public float was restored above 25% on the 28 May. 
The New News

After ZHI's shares were suspended ahead of trading on the 18 January "pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company". ZHI has now announced a pre-conditional privatisation by way of Scheme from Zhuhai SASAC's Longway Services Group.


The Offer price is HK$3.06/share, a 37.84% premium to last close, a 52.39% premium to the average closing price over the previous 30 trading days, and a life-time high. The Offer price will not be increased. No dividend has been declared, nor is one expected to be declared during the Offer period. 
Pre-conditions include signs offs from NDRC, MoC, and SAFE. As an SOE is making the Offer, these approvals should be rubber-stamped. 
The shareholding into ZHI remains unchanged since the float was restored last May. Zhuhai SASAC indirectly holds 61.5% of shares out. Scheme shareholders comprise 549.6mn shares or 38.5% of shares out. 


Key Scheme conditions include at least 75% of Independent Scheme Shares voting FOR &amp; not more than 10% of the votes attached to ALL the Independent Scheme Shares against. Therefore the blocking stake is 49.6mn shares, or 3.85% of shares out. No single shareholder has declared such a stake. No irrevocables have been given.


The headcount test applies as ZHI is Bermuda-incorporated. 


This deal looks done.


As always, more below the fold. 


Zhuhai Holdings (908 HK): Zhuhai SASAC Reloads With Scheme Offer