Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>After <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> announced an intention to buy 51.16%-55.00% of <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a> via a partial Tender Offer at ¥1,600, <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> took off. </li>
<li>Now <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> has countered with an unsolicited ¥1,800/share Offer  of Equity Value; TOB followed by a Benefit One buyback to mop up Pasona's stake.</li>
<li>The big news is how tax would be applied under Dai Ichi's deal structure, which should see Pasona's net proceeds significantly exceed those under M3's Offer. </li>
</ul>


After M3 Inc (2413 JP) announced an intention to buy 51.16%-55.00% of Benefit One Inc (2412 JP) via a partial Tender Offer at ¥1,600, Pasona Group (2168 JP) took off. 
Now Dai Ichi Life Insurance (8750 JP) has countered with an unsolicited ¥1,800/share Offer  of Equity Value; TOB followed by a Benefit One buyback to mop up Pasona's stake.
The big news is how tax would be applied under Dai Ichi's deal structure, which should see Pasona's net proceeds significantly exceed those under M3's Offer. 


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a>'s pre-conditional tender offer for <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a> is JPY1,800 (floor price) + share of <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a>’s TOB tax benefits.</li>
<li>The pre-conditions relate to the Board recommendation, Pasona support, and <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> offer not completing its partial offer. The tender offer starts in mid-January 2024 (20 business days).</li>
<li>While the Dai-ichi Life offer is light, M3's engagement in a bidding war is low. The proposed minimum acceptance condition (15.51% ownership ratio) requires a 32% minority acceptance rate.</li>
</ul>



Dai Ichi Life Insurance (8750 JP)'s pre-conditional tender offer for Benefit One Inc (2412 JP) is JPY1,800 (floor price) + share of Pasona Group (2168 JP)’s TOB tax benefits.
The pre-conditions relate to the Board recommendation, Pasona support, and M3 Inc (2413 JP) offer not completing its partial offer. The tender offer starts in mid-January 2024 (20 business days).
While the Dai-ichi Life offer is light, M3's engagement in a bidding war is low. The proposed minimum acceptance condition (15.51% ownership ratio) requires a 32% minority acceptance rate.


Benefit One (2412 JP): Dai-Ichi Life Counters M3 with a Privatisation Offer

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

Equity Bottom-Up

Lifenet Insurance Company / Equity Bottom-Up

Lifenet's management has successfully turned around the company's new business from stalling, and more initiatives are currently underway to drive its future growth.The company is still only trading at 0.8x P/EV. Although its valuation multiple is richer than the traditional life insurers in Japan, we view that it doesn't make sense for Lifenet, which had significant new business growth compared to those traditional life insurers, to trade below its EV.  The management announced its new embedded value target in the medium term. Our calculations showed a base case IRR of 21%if the company can achieve the target in 5 years.Key concerns centered around Lifenet's tech capability and profitability.

Lifenet's management has successfully turned around the company's new business from stalling, and more initiatives are currently underway to drive its future growth.The company is still only trading at 0.8x P/EV. Although its valuation multiple is richer than the traditional life insurers in Japan, we view that it doesn't make sense for Lifenet, which had significant new business growth compared to those traditional life insurers, to trade below its EV.  The management announced its new embedded value target in the medium term. Our calculations showed a base case IRR of 21%if the company can achieve the target in 5 years.Key concerns centered around Lifenet's tech capability and profitability.

Lifenet: A Rejuvenated InsurTech Story in Japan

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kanematsu-electronics-ltd" target="_blank" data-smartkarma-citation="entities:15767:1" rel="noopener">Kanematsu Electronics (8096 JP)</a> has recommended <a href="https://www.smartkarma.com/entities/kanematsu-corp" target="_blank" data-smartkarma-citation="entities:5810:1" rel="noopener">Kanematsu Corp (8020 JP)</a>’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).</li>
<li>The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.</li>
<li>The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. </li>
</ul>



Kanematsu Electronics (8096 JP) has recommended Kanematsu Corp (8020 JP)’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. 


Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

<ul>
<li>For <a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals (OZL AU)</a>,  look elsewhere unless you are VERY bullish copper. But if you are VERY bullish copper, buy copper options rather than the embedded option in OZL. </li>
<li>Game on as <a href="https://www.smartkarma.com/entities/warrego-energy-ltd-082ab214-f4bb-4224-b321-8977486cd661" target="_blank" data-smartkarma-citation="entities:7808:1" rel="noopener">Warrego Energy (WGO AU)</a> shareholders weigh the pros and cons of Hancock's all-cash Offer against <a href="https://www.smartkarma.com/entities/strike-energy-ltd" target="_blank" data-smartkarma-citation="entities:12473:1" rel="noopener">Strike Energy (STX AU)</a>'s "superior" scrip proposal. </li>
<li>
<a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">Jafco Co Ltd (8595 JP)</a> succumbed to greenmail and tried to boost the price to explain the exit they were going to give Murakami-san. It didn't work. </li>
</ul>


For OZ Minerals (OZL AU),  look elsewhere unless you are VERY bullish copper. But if you are VERY bullish copper, buy copper options rather than the embedded option in OZL. 
Game on as Warrego Energy (WGO AU) shareholders weigh the pros and cons of Hancock's all-cash Offer against Strike Energy (STX AU)'s "superior" scrip proposal. 

Jafco Co Ltd (8595 JP) succumbed to greenmail and tried to boost the price to explain the exit they were going to give Murakami-san. It didn't work. 


Last Week in Event SPACE: Oz Minerals, Warrego, JAFCO, Swire Pac's A&Bs, Korean Mandatory Offers

Japan

The Dai-ichi Life Insurance Company Ltd. underwrites and sells life, health and annuity insurance to groups and individuals. The Company offers a wide variety of insurance products to suit different needs, ranging from children's school tuition to emergency funds for the elderly.

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Dai Ichi Life Insurance (8750 JP)

Pasona Is Up Bigly. More To Come

Even if Dai-Ichi Life Offer for Pasona (via the buyback) is done at a small discount to M3's Offer, it would still be worth signficantly more to...

David Blennerhassett

Benefit One (2412 JP): Dai-Ichi Life Counters M3 with a Privatisation Offer

While the Dai-ichi Life offer is light, M3's engagement in a bidding war is low. Expect the Board and Pasona to support the offer. At the last...

Arun George

Lifenet: A Rejuvenated InsurTech Story in Japan

Activist investor (Effissimo Capital) has been gradually increasing and building its stake in Lifenet to 18.03% (mid-Oct) and has become the...

Alec Tseung

Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal.

Arun George

Last Week in Event SPACE: Oz Minerals, Warrego, JAFCO, Swire Pac's A&Bs, Korean Mandatory Offers

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

David Blennerhassett

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