Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On October 2nd, <a href="https://www.smartkarma.com/entities/8715" target="_blank" data-smartkarma-citation="entities:8715:1">Asatsu Dk Inc (9747 JP)</a> (hereafter "ADK") announced it had decided to terminate its 19-year Alliance with <a href="https://www.smartkarma.com/entities/22213" target="_blank" data-smartkarma-citation="entities:22213:1">WPP PLC (WPP LN)</a> and had sent a termination letter; ADK also announced the cancellation of its dividend, a new corporate strategy, the hedging of what appears to be most or all of its position in WPP shares, that Bain Capital would launch a tender offer at ¥3,660/share to purchase 50.1% or more of ADK, and that the board of directors recommended the Bain Capital Tender Offer.…

On October 2nd, Asatsu Dk Inc (9747 JP) (hereafter "ADK") announced it had decided to terminate its 19-year Alliance with WPP PLC (WPP LN) and had sent a termination letter; ADK also announced the cancellation of its dividend, a new corporate strategy, the hedging of what appears to be most or all of its position in WPP shares, that Bain Capital would launch a tender offer at ¥3,660/share to purchase 50.1% or more of ADK, and that the board of directors recommended the Bain Capital Tender Offer.…

Bain's Bid for ADK: Silchester and WPP Both Say "Undervalued" But Not Clear Why

On Monday October 2nd, Private Equity firm Bain Capital and third-largest (or most smallest of the "three majors) Japanese advertising company <a href="https://www.smartkarma.com/entities/8715" target="_blank" data-smartkarma-citation="entities:8715:1">Asatsu Dk Inc (9747 JP)</a> (hereafter "ADK") made a flurry of announcements to the effect that...<ol><li>
ADK (after a board meeting decision) officially effected the end of it's 19-year Capital and Business Alliance and a Cooperation and Alliance Agreement ("CAA") with global ad major (and 24.96% ADK shareholder) <a href="https://www.smartkarma.com/entities/22213" target="_blank" data-smartkarma-citation="entities:22213:1">WPP PLC (WPP LN)</a> through the commencement of CAA…</li></ol>

On Monday October 2nd, Private Equity firm Bain Capital and third-largest (or most smallest of the "three majors) Japanese advertising company Asatsu Dk Inc (9747 JP) (hereafter "ADK") made a flurry of announcements to the effect that...
ADK (after a board meeting decision) officially effected the end of it's 19-year Capital and Business Alliance and a Cooperation and Alliance Agreement ("CAA") with global ad major (and 24.96% ADK shareholder) WPP PLC (WPP LN) through the commencement of CAA…

Asatsu DK: Bain Capital Bids, WPP Complains, Arbitragers Bet on a Bump, But...

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

When Bain's offer for <a href="https://www.smartkarma.com/entities/8715" target="_blank" data-smartkarma-citation="entities:8715:1">Asatsu Dk Inc (9747 JP)</a> (Oct 3 - Nov 15 offer period with Nov 22 settlement) was announced, our initial impression was that the terms seemed relatively reasonable despite a modest premium, due to Asatsu's previous growth struggles, especially on the top line. At the time we were also under the impression that the deal was likely to have <a href="https://www.smartkarma.com/entities/22213" target="_blank" data-smartkarma-citation="entities:22213:1">WPP PLC (WPP LN)</a>'s approval. Since, then it has become clear that WPP was not previously informed of the deal and with their insistence that the offer terms were too cheap, we have taken a deeper look at the valuations of Asatsu DK and its closest domestic peers, <a href="https://www.smartkarma.com/entities/8736" target="_blank" data-smartkarma-citation="entities:8736:1">Hakuhodo Dy Holdings Inc (2433 JP)</a> and <a href="https://www.smartkarma.com/entities/12434" target="_blank" data-smartkarma-citation="entities:12434:1">Dentsu Inc (4324 JP)</a> .

When Bain's offer for Asatsu Dk Inc (9747 JP) (Oct 3 - Nov 15 offer period with Nov 22 settlement) was announced, our initial impression was that the terms seemed relatively reasonable despite a modest premium, due to Asatsu's previous growth struggles, especially on the top line. At the time we were also under the impression that the deal was likely to have WPP PLC (WPP LN)'s approval. Since, then it has become clear that WPP was not previously informed of the deal and with their insistence that the offer terms were too cheap, we have taken a deeper look at the valuations of Asatsu DK and its closest domestic peers, Hakuhodo Dy Holdings Inc (2433 JP) and Dentsu Inc (4324 JP) .

Asatsu DK: Chance of an Offer Hike Towards JPY4,000-4,100 Nearing 2006-2007 Highs

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

How times have changed in Japan. There was a time when foreign corporate raiders would pitch for Japanese companies, only for management to seek the support of friendly domestic investors to fend them off. In Japan M&amp;A 2017 style, foreign ownership of the Japanese stock market is such that foreign investors are on both sides of the fight, with management stuck in the middle.<a href="https://www.smartkarma.com/entities/8715" target="_blank" data-smartkarma-citation="entities:8715:1">Asatsu DK Inc (9747 JP)</a> is the latest Japanese firm to find itself in a battle with foreign investors, albeit a battle of…

How times have changed in Japan. There was a time when foreign corporate raiders would pitch for Japanese companies, only for management to seek the support of friendly domestic investors to fend them off. In Japan M&amp;A 2017 style, foreign ownership of the Japanese stock market is such that foreign investors are on both sides of the fight, with management stuck in the middle.Asatsu DK Inc (9747 JP) is the latest Japanese firm to find itself in a battle with foreign investors, albeit a battle of…

Asatsu (9747) - Bain Offers ¥3,660/Shr, WPP Objects

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

Thematic (Sector/Industry)

<ul>
<li>We’ve seen a number of advertising sector profit warnings from Dentsu to WPP amid signs that key clients across the FMCG sector are questioning the payback from digital advertising.</li>
<li>Indeed, Google has begun offering refunds to advertisers for fraudulent traffic driven by ‘click bots’, but stricter EU data privacy rules and the rise of ad blocking software are additional threats.</li>
<li>The ad sector risks being disintermediated as increasingly cost conscious brands facing rising EM competition create…</li>
</ul>


We’ve seen a number of advertising sector profit warnings from Dentsu to WPP amid signs that key clients across the FMCG sector are questioning the payback from digital advertising.
Indeed, Google has begun offering refunds to advertisers for fraudulent traffic driven by ‘click bots’, but stricter EU data privacy rules and the rise of ad blocking software are additional threats.
The ad sector risks being disintermediated as increasingly cost conscious brands facing rising EM competition create…


Advertising Industry Gets Disrupted, as Central Bankers Fly Blind…

United Kingdom

Pearson plc provides education products and services to institutions, governments and individual learners in over 80 countries. The Company's major revenue markets are North America, 'Core' including the UK, Italy and Australia and 'Growth' including Brazil, China and South Africa. It also owns the Financial Times, 50% of the Economist and 47% of Penguin Random House.

Liberty Global plc owns interests in broadband, distribution, and content companies operating outside the continental United States, principally in Europe, Asia, and Latin America.

Informa PLC provides business information on a worldwide basis.  The Company provides information in the finance and insurance, maritime transport and trade, law and tax, telecom and media, commodities and energy, and biomedical and pharmaceutical global markets.  Informa provides its information through newspapers, magazines, electronic media, books, and journals.

ITV plc is a United Kingdom media company covering broadcasting, news, and production.  The Company owns all of the regional Channel 3 licenses in England and Wales.  ITV owns ITV1, a commercial television channel, as well as ITV2, a partial interest in GMTV, and other interests.

4imprint Group PLC supplies imprinted promotional merchandise via the Internet and over the phone. The Company offers a wide range of imprinted products ranging from clothing and caps to pens and pencils.

Deliveroo PLC provides software solutions. The Company offers an online food delivery platform which allows users to order meals from partner restaurants, grocery stores, and other food suppliers. Deliveroo serves customers worldwide.

Future plc is a special interest media company with locations in the United States, United Kingdom and Australia. The Company produces special interest magazines, websites, and events, with portfolios in the computing, games, music, automotive, sports, crafts, and leisure sectors. ... More

YouGov plc provides online market research services in the United Kingdom, the United States, Germany, the Nordic countries, the Middle East, France, and Asia Pacific. The company offers quantitative services, such as brand tracking, brand health and equity studies, usage and attitude studies, consumer/market segmentation, concept/pack testing and evaluation, price evaluation, mystery shopping, customer satisfaction, media studies, opinion and social polling, and choice-based conjoint research services; and qualitative research services comprising target audience understanding, category exploration, brand equity and positioning, shopper research/retail strategy, concept development and evaluation, and communications development and evaluation services. It also provides data products, including YouGov BrandIndex, a daily brand perception tracker; YouGov Profiles, a planning and segmentation tool; YouGov Pulse, a real-time online behaviour tracker; and YouGov Reports, which offers market intelligence reports and sector trackers, as well as offers Omnibus that runs surveys to find people?s opinions, attitudes, and behaviors. In addition, the company is involved in the rating agency and software development businesses. YouGov plc was founded in 2000 and is based in London, United Kingdom.

M&C Saatchi plc provides advertising and marketing services worldwide. The company offers its services in the areas of brand consulting, PR, direct marketing, and mobile marketing, as well as sport and entertainment, Website construction, corporate PR, TV production, branding and digital marketing, and marketing strategy services. The company was founded in 1995 and is based in London, the United Kingdom.

Time Out Digital Limited, a multi-channel media company, provides information and booking opportunities for the arts, entertainment, culture, food and drink, and shopping worldwide. Its online platforms offer recommendations and reviews, as well as comprehensive arts, entertainments, and events listings. The company also publishes 30 editions of magazines; provides email and daily offers; develops mobile apps that allow the booking of tickets and restaurant tables; organizes live events and awards in the areas of comedy, film screenings, music gigs, and gallery tours; and publishes city guides and books. Time Out Digital Limited was founded in 1968 and is based in London, the United Kingdom.

Sirius XM Holdings Inc. broadcasts various channels of audio from its satellites. The Company provides its services throughout the continental United States for a monthly subscription fee. Sirius delivers various streams of commercial-free music in every genre, as well as streams of  news, sports, weather, talk, comedy, and public radio.

The New York Times Company operates media businesses.  The Company publishes daily newspapers and operates Internet websites.  The newspapers and websites distribute news and entertainment.

News Corporation operates in the publishing industry. The Company provides publications consisting of newspapers, magazines, books and promotional inserts.

The Interpublic Group of Companies, Inc. is an organization of advertising agencies and marketing service companies.  The Company operates globally in the sectors of advertising, independent media buying, direct marketing, healthcare communications, interactive consulting services, marketing research, promotions, experiential marketing, public relations, and sports marketing.

DENTSU INC. mainly provides comprehensive advertising services.  The Company also provides marketing and event planning & promotion services.  Dentsu has associated companies in the US, Europe, and Asia.

Liberty Broadband Corporation invests in communication companies. The Company has principal assets in TruePosition and Time Warner Cable.

Nexstar Broadcasting Group, Inc, is a television broadcasting company focused on the acquisition, development, and operation of television stations in medium using traditional media, e-MEDIA, digital and mobile media platforms. Nexstar Broadcasting Group, Inc offers its services in the central east part of United States.

Nexstar Broadcasting Group, Inc (NXST US)

CTS Eventim AG & Co. KGaA produces, sells, brokers and distributes entry tickets for concerts, theater productions, artistic, sporting and similar events. The Company operates an online booking system that allows event promoters to sell their tickets over a variety of distribution channels. CTS also sells tickets directly over the Internet and a call center and offers system support services.

Schibsted ASA, through its subsidiaries, owns and operates online classifieds services. The Company also owns and operates media houses with print and online positions. Schibsted operates in parts Europe and other international markets.

RTL Group S.A. is a multimedia company.  The Company operates television and radio stations throughout Europe, produces programming, and operates websites.  RTL distributes movies on CD, co-produces feature films, markets broadcast rights to sporting events, and offers entertainment over the Internet.

WPP plc operates a communications services group.  The Company's operations encompass advertising, media investment management, information and consultancy, public relations and public affairs, healthcare and specialist communications, and branding and identity services.

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WPP PLC (WPP LN)

Bain's Bid for ADK: Silchester and WPP Both Say "Undervalued" But Not Clear Why

On October 2nd, Asatsu Dk Inc (9747 JP) (hereafter "ADK") announced it had decided to terminate its 19-year Alliance with WPP PLC (WPP LN) and had...

Travis Lundy

Asatsu DK: Bain Capital Bids, WPP Complains, Arbitragers Bet on a Bump, But...

On Monday October 2nd, Private Equity firm Bain Capital and third-largest (or most smallest of the "three majors) Japanese advertising...

Travis Lundy

Asatsu DK: Chance of an Offer Hike Towards JPY4,000-4,100 Nearing 2006-2007 Highs

When Bain's offer for Asatsu Dk Inc (9747 JP) (Oct 3 - Nov 15 offer period with Nov 22 settlement) was announced, our initial impression was that...

Mio Kato

Asatsu (9747) - Bain Offers ¥3,660/Shr, WPP Objects

How times have changed in Japan. There was a time when foreign corporate raiders would pitch for Japanese companies, only for management to seek...

Pelham Smithers Associates

Advertising Industry Gets Disrupted, as Central Bankers Fly Blind…

We’ve seen a number of advertising sector profit warnings from Dentsu to WPP amid signs that key clients across the FMCG sector are questioning...

Sean Maher

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