Smart Share (EM US): On Stonewalling Hillhouse's Offer

• After seven months had elapsed since receiving a preliminary non-binding proposal, Smart Share Global (EM US) announced on the 1st August a firm Offer (an MBO) had been entered into.

• The Offeror consortium, led by Mars Guangyuan Cai, Chairman and CEO, is offering US$1.25/ADS, a 74.8% premium to last close; but ~20% below net cash + short-term investments.

• Hillhouse upped the ante with a US$1.77/ADS NBIO. The share price hasn’t closed below US$1.25/share since; but the reason may not just hinge on Hillhouse firming its Offer.

Smart Share is an illiquid stock. If that’s not your bag, look away now.

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The Trade:

• This is trading through the MBO, but 30% adrift of Hillhouse’s Offer.

• Management appear to have zero interest in Hillhouse’s Offer. Or upping its own bid.

• Unless you believe Hillhouse’s Offer can be firmed, current levels are attractive only for dissenters.