Feb. 18 at 4:21 PM
$LU
Anyone know on whether Ping An's shareholding goes over level in HK for a mandatory offer if their convertible bond is converts at
$4.94?
The timing is beginning to line-up.
Why would Ping An convert to shares at
$4.94 when SP at
$3? (a) Because that dilutes the number of shares and lowers the book value per share of the remaining shares and mandatory offer price; (b) they get more shares at lower than the likely
$10+ price of a mandatory offer given book value; (c) they could not get that many shares on open market
Why would Ping An make an offer NOW (or soon, i.e. before April 30th deadline for conversion): Because coming quarters are going to be increasingly profitable taking SP increasingly higher
(The other option: Ping leaves Lufax public, SP goes higher, and Lufax's pays big cash divvy. Why do that? Cos Ping execs own LU shares in US (7% of the company) and get offshore funds ...If you are worried about US-China tensions as Ping exec, now time to bank your offshore dollars)
