Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Toshiba announced that it will start a sale process by offering info, and running a two-round "strategic alternative" process. Info and non-binding proposals followed by due dili and binding proposals.</li>
<li>For me, this seems like "That One Piece Of News" which is required to make the range jump, and to get people into Now-We-Are-Going-To-Get-A-Deal. </li>
<li>We may not, of course, and it will be a long, complicated road. But this is a step change. Starting a beauty contest is a big deal.</li>
</ul>


Toshiba announced that it will start a sale process by offering info, and running a two-round "strategic alternative" process. Info and non-binding proposals followed by due dili and binding proposals.
For me, this seems like "That One Piece Of News" which is required to make the range jump, and to get people into Now-We-Are-Going-To-Get-A-Deal. 
We may not, of course, and it will be a long, complicated road. But this is a step change. Starting a beauty contest is a big deal.


Toshiba (6502) - Now We Have "That One Piece Of News"

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.

<ul>
<li>Yesterday the Nikkei published an article featuring Bain MD Yuji Sugimoto who also featured heavily during their bid for Kioxia. </li>
<li>Sugimoto commented that in the event of a buyout there would be no break-up of Toshiba. </li>
<li>While plausibly a PR move directed at employees that stance raises the question of exactly how they would unlock value.</li>
</ul>


Yesterday the Nikkei published an article featuring Bain MD Yuji Sugimoto who also featured heavily during their bid for Kioxia. 
Sugimoto commented that in the event of a buyout there would be no break-up of Toshiba. 
While plausibly a PR move directed at employees that stance raises the question of exactly how they would unlock value.


Toshiba – Some Thoughts on the Bain Article

David Blennerhassett

<ul>
<li>#2 shareholder and erstwhile activist 3D Investment Partners writes a letter to <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>'s Board demanding 3 measures before the AGM. </li>
<li>
<a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> is assessing Perpetual's cash/scrip Offer provides an indicative price of $6.23/share; however, the wording in the announcement suggests the bid is opportunistic and will be rejected. </li>
<li>Because of rising regulatory requirements for NBFCs, a <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> /<a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> was to be expected at some point.</li>
</ul>


#2 shareholder and erstwhile activist 3D Investment Partners writes a letter to Toshiba Corp (6502 JP)'s Board demanding 3 measures before the AGM. 

Pendal Group (PDL AU) is assessing Perpetual's cash/scrip Offer provides an indicative price of $6.23/share; however, the wording in the announcement suggests the bid is opportunistic and will be rejected. 
Because of rising regulatory requirements for NBFCs, a HDFC Bank (HDFCB IN) /HDFC Limited (HDFC IN) was to be expected at some point.


Last Week in Event SPACE: Toshiba, Pendal, HDFC Bank, YZJ Shipbuilding, BHP, Virtus

<ul>
<li>On 24 March, the EGM defeated both company and 3D Investment proposals. That night, a leak in the Nikkei said the company would pursue privatisation measures. Supply side interest. Check. </li>
<li>That same day, Bain signed a "Confirmation Agreement" with lead Toshiba shareholder Effissimo would tender into a Bain Tender Offer. Demand Side interest confirmed. Check. </li>
<li>Now we have a 3D public letter to the Board demanding 3 measures before the AGM. </li>
</ul>


On 24 March, the EGM defeated both company and 3D Investment proposals. That night, a leak in the Nikkei said the company would pursue privatisation measures. Supply side interest. Check. 
That same day, Bain signed a "Confirmation Agreement" with lead Toshiba shareholder Effissimo would tender into a Bain Tender Offer. Demand Side interest confirmed. Check. 
Now we have a 3D public letter to the Board demanding 3 measures before the AGM. 


Toshiba (6502) - 3D Writes Another Letter

<ul>
<li>3D Investment Partners has sent another open letter to Toshiba’s Board of Directors once again pushing for privatisation options. </li>
<li>Once again, the fund's claims and demands come across as rather shrill and potentially desperate. </li>
<li>3D’s behaviour is a stark contrast with other activists who have been quieter and more skilful and could be the biggest risk to Toshiba in our view.</li>
</ul>


3D Investment Partners has sent another open letter to Toshiba’s Board of Directors once again pushing for privatisation options. 
Once again, the fund's claims and demands come across as rather shrill and potentially desperate. 
3D’s behaviour is a stark contrast with other activists who have been quieter and more skilful and could be the biggest risk to Toshiba in our view.


Japan

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

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Toshiba Corp (6502 JP)

Toshiba (6502) - Now We Have "That One Piece Of News"

Toshiba has started a beauty contest process. There will be two stages, and the news on Stage I will only come after the AGM (Toshiba's pushback to...

Travis Lundy

Toshiba – Some Thoughts on the Bain Article

We examine the progress Kioxia has made under Bain's guidance and wonder whether a Toshiba purchase would be an attempt to salvage a failed Kioxia...

Mio Kato

Last Week in Event SPACE: Toshiba, Pendal, HDFC Bank, YZJ Shipbuilding, BHP, Virtus

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Toshiba (6502) - 3D Writes Another Letter

Toshiba (6502) has been racking up its "positive newsflow points" in the last several days. This may be the last near-term shoe to fall.

Travis Lundy

Toshiba – 3D At It Again

3D Investment Partners has sent another open letter to Toshiba’s Board of Directors and we believe its constant aggravation could be the biggest...

Mio Kato

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