Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>When Bain came out saying they would bid more, with preparation to launch in November, KKR launched early to see if they could get the jump, discussed <a href="https://www.smartkarma.com/insights/fuji-soft-9749-kkr-launches-early-to-stymy-bain-who-has-a-founding-family-tailwind" target="_blank" rel="noopener">here</a>.</li>
<li>The stock popped when the Bain's bid was obviously serious, and supported by the Founding Family, but it went to Bain's "5% higher" plus another 5%. I was bearish.</li>
<li>But I signalled willingness to change my mind if the stock price dropped. It has dropped. </li>
</ul>


When Bain came out saying they would bid more, with preparation to launch in November, KKR launched early to see if they could get the jump, discussed here.
The stock popped when the Bain's bid was obviously serious, and supported by the Founding Family, but it went to Bain's "5% higher" plus another 5%. I was bearish.
But I signalled willingness to change my mind if the stock price dropped. It has dropped. 


David Blennerhassett

<ul>
<li>Buy dips on the possibility that 3DIP would not agree to Bain. Otherwise, at ¥9,000 <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft (9749 JP)</a> is a buy, and at ¥9,500, it's probably a sell near-term.</li>
<li>Drilling down into its balance sheet uncovers additional value for <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>; but not enough to move the needle</li>
<li>
<a href="https://www.smartkarma.com/entities/exedy-corp" target="_blank" data-smartkarma-citation="entities:6516:1" rel="noopener">Exedy Corp (7278 JP)</a> completed its buyback. Murakami Group bought more. The stock (pro-forma) is at 0.62x book, 0.54x book for the non-cash portion. There's LOTS of cash left.</li>
</ul>


Buy dips on the possibility that 3DIP would not agree to Bain. Otherwise, at ¥9,000 Fuji Soft (9749 JP) is a buy, and at ¥9,500, it's probably a sell near-term.
Drilling down into its balance sheet uncovers additional value for Jardine Matheson Holdings (JM SP); but not enough to move the needle

Exedy Corp (7278 JP) completed its buyback. Murakami Group bought more. The stock (pro-forma) is at 0.62x book, 0.54x book for the non-cash portion. There's LOTS of cash left.


Last Week in Event SPACE: Fuji Soft, Jardine Matheson, Exedy, Henderson

<ul>
<li>KKR has launched its deal early to make life difficult for Bain, who has Founding Family support, due diligence, and another hearing with the company to make a Binding Bid.</li>
<li>The combination of Bain's PR on 3 September and the new documents out late last night from KKR and Fuji Soft show a picture of KKR/3D somehow acting coercively.</li>
<li>This is something of a mess. It should become a case study for lawyers/advisors of what NOT to do when a large PE firm approaches you. Expect a bun fight.</li>
</ul>


KKR has launched its deal early to make life difficult for Bain, who has Founding Family support, due diligence, and another hearing with the company to make a Binding Bid.
The combination of Bain's PR on 3 September and the new documents out late last night from KKR and Fuji Soft show a picture of KKR/3D somehow acting coercively.
This is something of a mess. It should become a case study for lawyers/advisors of what NOT to do when a large PE firm approaches you. Expect a bun fight.


Fuji Soft (9749) - KKR Launches Early to Stymy Bain Who Has a Founding Family Tailwind

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>In response to the potential Bain competing offer for <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, KKR has waived the precondition and launched its offer at unchanged JPY8,800 per share.</li>
<li>Bain’s due diligence ends on 20 September, and it aims to submit a binding proposal in October. This timeline will thwart KKR’s offer, which closes on 21 October.</li>
<li>KKR’s offer launch at unchanged terms is delaying the inevitable and will have to bump to succeed. A potential bidding war is likely to push the offer price to JPY10,500. </li>
</ul>


In response to the potential Bain competing offer for Fuji Soft Inc (9749 JP), KKR has waived the precondition and launched its offer at unchanged JPY8,800 per share.
Bain’s due diligence ends on 20 September, and it aims to submit a binding proposal in October. This timeline will thwart KKR’s offer, which closes on 21 October.
KKR’s offer launch at unchanged terms is delaying the inevitable and will have to bump to succeed. A potential bidding war is likely to push the offer price to JPY10,500. 


Fuji Soft (9749 JP): KKR's Cop-Out as It Launches at Unchanged Terms, Next Move Bain

<ul>
<li>The original Target Opinion Statement for KKR's bid at ¥8,800/share offered a glimpse at a non-binding, questionably feasible offer at a slightly higher price, which 3DIP might have rejected.</li>
<li>That was apparently Bain, and now we know Bain has consistently had the higher price. <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> handled this whole process badly, perhaps cowed by 3DIP.</li>
<li>Now the cat is amongst the pigeons. This is less hostile than it looks IMO. The market thinks it will be a bun fight. </li>
</ul>


The original Target Opinion Statement for KKR's bid at ¥8,800/share offered a glimpse at a non-binding, questionably feasible offer at a slightly higher price, which 3DIP might have rejected.
That was apparently Bain, and now we know Bain has consistently had the higher price. Fuji Soft Inc (9749 JP) handled this whole process badly, perhaps cowed by 3DIP.
Now the cat is amongst the pigeons. This is less hostile than it looks IMO. The market thinks it will be a bun fight. 


Fuji Soft (9749 JP) - Bain Bids More, The Market Goes Even Higher

Japan

FUJI SOFT INCORPORATED is an independent software developer, specializing in communications and machine control software, business application software for bank and insurance companies, and operating system software.  Fuji Soft also installs, manages, and maintains computer systems.  The Company develops and sells word processing packaged software and also provides internet service.

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Fuji Soft Inc (9749 JP)

Fuji Soft (9749) - Fuji Softer

Bain announced a re-launch of their earlier Fuji Soft bid "5% higher" than KKR. KKR responded by launching early, but Bain has Founder support. The...

Travis Lundy

Last Week in Event SPACE: Fuji Soft, Jardine Matheson, Exedy, Henderson

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

Fuji Soft (9749) - KKR Launches Early to Stymy Bain Who Has a Founding Family Tailwind

KKR has launched its TOB on Fuji Soft. Clarifications in various documents show the process was messier and less complete than it should have been....

Travis Lundy

Fuji Soft (9749 JP): KKR's Cop-Out as It Launches at Unchanged Terms, Next Move Bain

KKR’s offer launch at unchanged terms is delaying the inevitable. It will have to be bumped to succeed. A potential bidding war could push the...

Arun George

Fuji Soft (9749 JP) - Bain Bids More, The Market Goes Even Higher

Bain was apparently the "Third Party" referred to in the KKR Deal Target Opinion Statement. Bain has clarified what went wrong (Fuji Soft's process...

Travis Lundy

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