M&A Event Driven Trade - 1337 HK, RAZER INC

This could be of interest to stockbitors who liked past deals like $IJMPLNT / 2216 (IJM PLANTATIONS BERHAD) $MMCCORP / 2194 (MMC CORPORATION BERHAD) $SPB / 1783 (SELANGOR PROPERTIES BERHAD)

I'm sure everyone in Stockbit knows Razer.

On December 1, 2021 - Razer announced a pre-conditional Scheme from its founders and CVC to buy the company at HK$2.82/share.

Yesterday, the pre-conditions had been fulfilled. The next key conditions for the delisting will be the headcount test and approval by at least 75% independent H-shareholders (<10% of all independent H-shareholders rejection).

This could be held in early May and possible completion of entire deal in June / July.

Consensus FV of Razer (which I'm agreeable to) is around HKD 2.30- HKD 2.60, means that the offer is good price. Additionally, recent market condition means closest peer Logitech had some multiple de-rating, making the offer price even more attractive.

Price before rumours of the deal happening or the break away price was around HKD1.80 which I think is pretty "value".

All in all, the spread is at around 12% absolute with completion ranging 4-5 months. Annualised return could be up to 37%. Risk reward feels reasonable.

This is a low risk event driven trade idea for those who wants to counter recent choppy market.

@zhexiangxd @mengteck @zhengyou0705 @Jay888 @facademy @Goldenhorse77