Issue 5

Allianz said to make headway in talks to acquire Malaysian auto insurer

Allianz Malaysia Bhd. has been chosen to progress in talks to acquire Malaysia’s second-biggest car insurer after edging out Japanese rival Mitsui Sumitomo Insurance Co., people with knowledge of the matter said. AmGeneral Insurance Bhd.’s owners have decided to enter detailed discussions with Allianz on a potential deal, according to the people, who asked not to be identified because the information is private. 

They have applied for Malaysian central bank approval to allow Allianz to conduct due diligence on the business and formally proceed with negotiations on terms of a transaction, one of the people said. The insurer could be valued at about $800 million in a sale, the people said. AMMB Holdings Bhd. and Insurance Australia Group Ltd., which jointly own AmGeneral, haven’t ruled out pursuing a deal with other suitors should talks with Allianz falter, according to one of the people. 

Representatives for Allianz and AMMB said they couldn’t immediately comment, while representatives for IAG and Mitsui Sumitomo Insurance declined to comment. Any deal could encourage Prudential Plc and Tokio Marine Holdings Inc., which have also been considering selling stakes in their Malaysian insurance units. 

Bloomberg News reported last month that Allianz Malaysia and Mitsui, a unit of Japan-listed MS&AD Insurance Group Holdings Inc., were shortlisted to bid for AmGeneral. Kuala Lumpur-listed AMMB owns 51 percent of AmGeneral, while IAG holds the remainder. 

An acquisition could also include a bancassurance agreement, which would give the buyer the right to distribute insurance products through AMMB’s branch network, people familiar with the matter said last month. AmGeneral is the country’s second-biggest auto insurer with a market share of 15 percent, its website shows. It ranked fifth in the overall Malaysian general insurance market as of the first half of 2018. The company has more than 4 million policies and a network of 7,000 agents and dealers.


From – Deal Street Asia


Thailand-based restaurant chain operator ZEN eyes IPO in Q1

Zen Corporation, a holding company that operates several restaurants, plans to sell 75 million shares, equivalent to 25 per cent of its registered capital, in an initial public offering (IPO) on the Thai stock exchange in the first quarter. 

It plans to use the IPO proceeds to fuel its expansion, improve its existing locations and repay loans to commercial banks, according to its announcement last week. Zen operates several restaurant chains such as ZEN, Musha by ZEN, Sushi Cyu Carnival Yakiniku, AKA, On the Table Toky Cafe, Tetsu and de Tummour. 

Besides, it runs the full gamut of food services including food delivery, catering, restaurant management and consultancy, and food retail. Boonyong Tansakul, chief executive officer of Zen, said that the firm aims to be a leader in the food service business in Thailand. It expects total revenue to hit 10 billion baht ($317.43 million) by 2022. 

In the first three quarters of 2018, it posted total revenue of 2.22 billion baht. Its net profit surged 120.9 per cent from 49.2 million baht in the first nine months of 2017 to 108.7 million baht in the same period last year on the back of growth in its restaurants and franchise businesses. 

It plans to add 36 of its own branches and 175 franchise branches in 2019. Kasikorn Securities is acting as the financial advisor to this IPO.

From – Deal Street Asia

Japanese AI startup Cinnamon raises $15m in Series B funding

Cinnamon, a Japanese startup that uses artificial intelligence (AI) to improve workplace productivity, on Monday announced that it has raised $15 million in a Series B funding round. 

The latest funding, which aims to support Cinnamon’s expansion into the US, came from a group of investors that includes existing backer SBI Investment and Mirai Creation Investment Limited Partnership II, an investment arm of SPARX Group, the company told DEALSTREETASIA in an interaction. 

Other investors include FFG Venture Business Partner, ITOCHU Techno-Solutions Corporation, Sony Innovation Fund, TIS Inc, Nomura Incubation Investment Limited Partnership, Sumitomo Corporation and SMBC Venture Capital. 

The capital raised will also be used to enhance its AI platform and build products to drive business process re-engineering for large corporations, Cinnamon said in its statement. It also expects to build a team of 200 high-tech engineers and researchers in Vietnam by the end of 2019. 

Cinnamon’s core product is an auto-documentation tool called Flax Scanner that allows users to extract information from application forms, documents, and email, and then create formatted documents. The Japan-based company has offices in Tokyo, Silicon Valley, and Vietnam. 

“We are strengthening several areas of the company to handle our growth. Our initial objectives for Cinnamon in the US include establishing the company as a technology presence in Silicon Valley while adding to our core development group and on-boarding a U.S. sales team,” said Cinnamon Inc CEO Miku Hirano. 

In June 2018, the AI startup had raised $9 million in equity and debt financing from multiple investors, including SBI Investment, and major Japanese banks.

From – Deal Street Asia

Tencent-backed Maoyan Entertainment prices HK IPO at lower end, raises $250m

Maoyan Entertainment, China’s top movie-ticketing platform by sales that is backed by Tencent, priced its Hong Kong IPO at the bottom of an indicative range to raise $250 million, according to a term sheet seen by Reuters. 

A pricing at the lower end would value Maoyan at $2.2 billion, indicating a “down round” for Tencent, as it is less than a valuation in 2017 when the tech giant invested 1 billion yuan ($148.45 million), a term sheet showed last week. 

Maoyan was valued at about $3 billion at the time of Tencent’s investment, two sources have previously said. The movie-ticketing platform sold about 11.6 percent of its enlarged share capital at HK$14.80 per share on Monday, versus an indicative range of HK$14.80 and HK$20.40 ($1.89-$2.60). 

Maoyan, backed also by online food delivery-to-ticketing services provider Meituan Dianping, did not immediately respond to a request for comment. Maoyan had initially been looking to raise $500 million to $1 billion in its IPO, sources said in September. But the loss-making firm cut the deal size due to limited investor interest and sensitivity to valuations, two other people familiar with the matter have said. 

The firm’s float is being watched as a test of investor sentiment for Hong Kong deals after a patchy performance by newly listed stocks in 2018 amid U.S.-China trade tensions. Many firms like Meituan and Xiaomi, which raised billions of dollars in their listings, are still trading below their IPO prices in Hong Kong. And this is despite the fact that the Asian financial hub emerged as the world’s top IPO centre by volume last year, with $36.30 billion raised, Refinitiv data shows. 

Volatile markets and soaring private valuations have made going public tough for many Chinese technology start-ups, and several bankers expect fewer blockbuster listings this year. The down round suffered by Tencent in Maoyan’s IPO mirrors that faced by e-commerce giant Alibaba in the 2018 IPO of parenting website Babytree Group. Maoyan offers ticketing services through its Maoyan and Gewara apps in China – the world’s second-largest movie market after the United States – and mainly distributes domestic films. 

However, it did help with the distribution of the 2017 romantic drama “The Shape of Water”, which won four Oscars, according to its prospectus. Maoyan’s revenue almost doubled in the first nine months of 2018 to 3.1 billion yuan, the prospectus showed. 

It has yet to turn in a net profit, but its loss narrowed to 144 million yuan over the same period from 152.1 million yuan a year ago. Bank of America Merrill Lynch and Morgan Stanley are joint sponsors for the Maoyan listing. Its shares are expected to start trading on Feb. 4.

From – Deal Street Asia

Didi Chuxing, Beijing Electric form JV for new energy vehicle, AI projects

China’s Didi Chuxing said on Monday it had set up a joint venture (JV) with Beijing Electric Vehicle Co., a unit of Chinese carmaker BAIC, which will work on new energy vehicle and artificial intelligence projects. 

The JV, BAIC-Xiaoju New Energy Auto Technology Co. Ltd, aims to develop “next-generation connected-car systems”, Didi, China’s largest ride-hailing operator, said in a statement. 

This is the first JV between Didi and state-owned BAIC, which wants to stop selling gas driven car models by 2025 as China shifts the industry toward new energy vehicles (NEVs).

From – Deal Street Asia

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