Shengjing Bank (2066 HK): Dire Status, Dire Offer Price

• HK$1.32/Share, a 15.79% premium to undisturbed, and a massive 86.49% discount to NAV. For a rural commercial bank privatisation, there is nothing pretty in those numbers.

• Even the Offers for Bank Of Jinzhou (416 HK) and Jilin Jiutai Rural Comm Bank (6122 HK) were pitched (slightly) higher, from a P/NAV standpoint. And both were perennially suspended.

• This is privatisation via a voluntary offer, NOT a privatisation via a Merger by Absorption. As such there is scheme-like vote AND a 90% tendering condition.

Shengjing Bank is super illiquid - look away now if this is not your thing.

The Trade:

• This probably gets up, in short succession.

• If illiquid arbs are your bag, pay up to HK$1.25 assuming a four-month off-ramp.

• Otherwise, look elsewhere.