Merry Christmas and a Happy New Year

Wishing all the readers Merry Christmas and a great New Year in 2013.

It has been a difficult year which saw a period where deals just dried up in Asia Pacific and several deals go bust. However a flurry of deals were just announced before the year end and we hope that most of you have made money this year!

We are happy to announce that Merger Arbitrage Manager has now achieved close to 100 downloads. We hope that sales will continue into this festive season and more people would find the app helpful in understanding Merger Arbitrage risk-returns.

Once again have a Merry Christmas wherever you are.

Signing off for the year,
The Ex-Hedge Fund

Billabong_revisited 2

I got out of my earlier position. Must admit have read the situation wrongly. But given the muddy waters in this deal, I am out. Although it seems the Mr Naude is potentially more optimistic about the turnaround of the company given the US division has been the one bringing in revenue and profit, I must admit, after such  long time, I am getting very sceptical what is the value of the company, and all the non-binding clauses, which enables the acquirer to re-value their bid

HK Deal : 0053.HK privatisation by group led by Quek Leng Chan

Summary of Deal :

$88 offer price per share
Unconditional
Acquirer already has 74.47%
Mandatory acquisition once reach 90%

Currently trading above offer price. Not entering

TCC extends F&N bid yet again

SINGAPORE - TCC Assets, the family company of Thai whiskey magnate Charoen Sirivadhanabhakdi, yesterday extended for the fourth time a deadline for its S$8.8 billion bid for full control of the Singapore property, publishing and food and beverage conglomerate Fraser & Neave.

The closing date for the S$8.88 a share bid now falls on Jan 2, a day before a higher bid of S$9.08 per share by Overseas Union Enterprise (OUE) - controlled by Indonesia's Riady family - is due to expire.

Under Singapore's Code on Takeovers and Mergers, an offer normally has to be finalised within 60 days of the initial offer, which in TCC's case was Sept 13. 

But the Securities Industry Council has the authority to grant an extension in special circumstances, such as when a competing bid is made, and it has been about one and a half months since OUE made its rival bid.

What surprised many market observers was that there was no attempt by the Thais to better OUE's offer, thereby making it unlikely that any other F&N shareholder will sell his stake to TCC.

TCC, together with its listed vehicle Thai Beverage, is F&N's largest shareholder with a 35.68-per-cent stake, inclusive of 2.02 per cent in acceptances that becomes ownership only after the 50-per-cent mark is achieved.

"What's the point of extending the deadline without upping the OUE offer? And how will OUE respond to the extension?" asked an exasperated shareholder, who said both offers were inadequate.

Many think the bid for F&N has to be at least S$9.50 a share before new acceptances come in. 

The independent advisers to F&N's board have found TCC's offer "not compelling, though fair". 

Nomura Securities analyst Lim Jit Soon, who has a target price of S$10.48 on F&N, thinks that OUE could bid as high as S$9.88 a share.

Japanese beer maker Kirin Holdings, which has a 14.8-per-cent stake in F&N, has agreed to tender its shares to OUE, which is largely focused on office and hotel ownership and development. Kirin has also offered to buy over F&N's food and beverage business for S$2.7 billion should the Riadys succeed.


Article above taken from TODAYonline. Article by Conrad Raj

Australia Deal : GPT offers to take up commercial and industrial properties off Australand

Still much to be revealed..stay tune.

Sundance Resources Update

A reader has commented on this deal. I must apologize as I missed the comment made.

From my perspective, the deal will go through. Given the commitment on Hanlong Mining Investment and the in principle agreements from the government, it should not be a problem.

When we enter these deals, ie Chinese buyer and African country assets, you would expect regulatory risk and should have been priced into your buy levels, ie only buy in when the risk premium suits you.

Also you could see Hanlong providing (albeit a small ) convertible note facility for A$15m as working capital for Sundance as the deal moves forward. Hanlong also holds the biggest stake in Sundance as well. Price of Sundance now is reasonably close to what it was before the deal announcement (however caution here as it seems like Sundance may have a liquidity problem).

Given the reasons above, I would believe the deal would be successful in the end, but the question remains when it will close and will there be another drop in offer price.

Pricing using Merger Arbitrage Manager as below :

Has a 40% premium and a 13.33% implied success. Given this, I would caution against a big position.

Potential Merger : Alacer Gold

Attention gold miners with a spare 1.86 billion Australian dollars (US$1.95 billion) handy. Macquarie analyst Mitch Ryan reckons you could spend it on a takeover ofAlacer Gold Corp. ASR.T +3.67%.

“We believe that Alacer is becoming an increasingly interesting target for a potential takeover, our rationale being an acquirer can pay a reasonable premium to recent share prices, assume zero value for Australian assets and still be in the black for the prize Turkish assets,” he said in a note to clients.

Under such a scenario, the broker believes an acquirer could pay between A$6.50 and A$7.00 to gain control, which would value Alacer between A$1.86 billion and A$2 billion.

Mr. Ryan, who described Alacer’s portfolio of assets as Jekyll and Hyde, notes that the company’s Australian operations could face a 50% write down, hamstrung by a high-cost environment.

He thinks Alacer’s review of its Australian business unit could result in the divestment of some or all of its assets – currently carried at US$1.2 billion. But he notes any write down would be unlikely to cause balance sheet pressure or restrict Alacer’s ability to pay dividends.

Macquarie believes that any potential suitors won’t rush a deal out, choosing instead to wait until the first quarter of 2013 or for the outcome of the Australian business review and the bankable feasibility study for its 80%-owned Copler Sulfides project in Turkey.

Macquarie has an Outperform recommendation and a price target of A$6.20 a share on Alacer which last traded at A$4.55 a share. The stock has fallen 54.7% in the year to date, making it the worst-performing gold stock in the S&P/ASX200.

excerpt above taken from WSJ.

Singapore Deal : SC Global bid by owner to go Private

Offer Highlights

• The Offer Price is $1.80 per Share in cash and is unconditional in all respects.

• The Offer represents an opportunity for Shareholders to exit and realise their

• Mr Simon Cheong already owns or controls a 55.06%  stake in SC Global

Developments Ltd ("SC Global" or the "Company") and is seeking to de-list

and privatise SC Global for the following reasons:

• Shareholders who accept the Offer before the Offer closes will be paid the

Offer Price for their Offer Shares within 10 days after the receipt by the

Offeror of valid and complete acceptances of the Offer.

Deal offered at $1.80. Last close price at $1.21. Roughly 48.76% premium to close. However as this deal is unconditional, expect it to trade at $1.80 upon open. Should not have any money left on the table. If there are any money to be made inclusive of your brokerage cost, go for it. 

I do not think there will be another higher bid coming in given Mr Simon Cheong already owns 55.06% (control of the company) and this exercise is to defray the cost of listing,reporting and regulatory redtapes, So there is not an inherent call option in this deal.

Merger Arbitrage Manager Lite Version

After receiving some feedbacks from users, we have released a lite version of Merger Arbitrage Manager so that potential users can have a look at what is in the app.

We shall be updating this app in the near future as well.

Visit in iTunes Store,  Merger Arbitrage Manager

Lite version, Merger Arbitrage Manager Lite






Let me know if there are anymore feedbacks/suggestions. Thank you for your support