Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today after the close, Advantage Partners announced the intention to launch a TOB to take over <a href="https://www.smartkarma.com/entities/furukawa-battery-co-ltd" target="_blank" data-smartkarma-citation="entities:6513:1" rel="noopener">Furukawa Battery (6937 JP)</a> at ¥1,400 - a 26% premium to last.  </li>
<li>This will require substantial time to obtain regulatory and foreign investment clearances so it is anticipated the Tender Offer will be launched at end-March 2025. I expect that is conservative.</li>
<li>The price paid to minorities is a premium. But the price paid by the buyer is actually a takeunder. And it gets worse from there. </li>
</ul>


Today after the close, Advantage Partners announced the intention to launch a TOB to take over Furukawa Battery (6937 JP) at ¥1,400 - a 26% premium to last.  
This will require substantial time to obtain regulatory and foreign investment clearances so it is anticipated the Tender Offer will be launched at end-March 2025. I expect that is conservative.
The price paid to minorities is a premium. But the price paid by the buyer is actually a takeunder. And it gets worse from there. 


Furukawa Battery (6937) - Ugly Process in Virtual Take-Under Take-Private

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/furukawa-battery-co-ltd" target="_blank" data-smartkarma-citation="entities:6513:1" rel="noopener">Furukawa Battery (6937 JP)</a> recommended a pre-conditional tender offer from Advantage Partners, <a href="https://www.smartkarma.com/entities/tokyo-century-corp" target="_blank" data-smartkarma-citation="entities:8053:1" rel="noopener">Tokyo Century Corp (8439 JP)</a> and <a href="https://www.smartkarma.com/entities/furukawa-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:5193:1" rel="noopener">Furukawa Electric (5801 JP)</a> consortium at JPY1,400, 22.6% premium to the undisturbed price.</li>
<li>The precondition is approval under the competition laws of Japan and Thailand. The offer is long-dated and anticipated to commence in March 2025.</li>
<li>While not a knockout bid, the required minority acceptance rate is not onerous. A long-dated offer presents a free option on a bump due to earnings upside or a counteroffer.</li>
</ul>



Furukawa Battery (6937 JP) recommended a pre-conditional tender offer from Advantage Partners, Tokyo Century Corp (8439 JP) and Furukawa Electric (5801 JP) consortium at JPY1,400, 22.6% premium to the undisturbed price.
The precondition is approval under the competition laws of Japan and Thailand. The offer is long-dated and anticipated to commence in March 2025.
While not a knockout bid, the required minority acceptance rate is not onerous. A long-dated offer presents a free option on a bump due to earnings upside or a counteroffer.


Furukawa Battery (6937 JP): Long-Dated Pre-Conditional Offer at JPY1,400

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  SPX +0.6% on intraday bounce; Defensives led w/Utilities; Financials lag as Banking fears persist; Rates down on recession view WHILE Fed signals more hikes; MSFT-ATVI deal closer to approval</li>
<li>JAPAN. NKY Futs -0.9% vs Cash; Weaker USDJPY 130.7 ;  Kishida Approval Rating Rises; Feb Inflation 3.1%;  ValueAct takes off gloves with 7&amp;i; Shippers in focus with ex-div this week. </li>
<li>NUGGET. 7&amp;i: Activist ValueAct goes Full John Wick calling for removal of 4 Directors, including Chairman/CEO Isaka. 2023 could be the year of accelerated reforms.  Stock looks attractive post sell-off.</li>
</ul>


OVERSEAS.  SPX +0.6% on intraday bounce; Defensives led w/Utilities; Financials lag as Banking fears persist; Rates down on recession view WHILE Fed signals more hikes; MSFT-ATVI deal closer to approval
JAPAN. NKY Futs -0.9% vs Cash; Weaker USDJPY 130.7 ;  Kishida Approval Rating Rises; Feb Inflation 3.1%;  ValueAct takes off gloves with 7&amp;i; Shippers in focus with ex-div this week. 
NUGGET. 7&amp;i: Activist ValueAct goes Full John Wick calling for removal of 4 Directors, including Chairman/CEO Isaka. 2023 could be the year of accelerated reforms.  Stock looks attractive post sell-off.


Good Morning Japan |SPX Rallies but Uncertainties Remain; NUGGET: 7&I-ValueAct Goes Full John Wick

<ul>
<li>Yesterday, Carlyle announced a buyout of <a href="https://www.smartkarma.com/entities/totoku-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:2895:1" rel="noopener">Totoku Electric (5807 JP)</a> at ¥5,660/share, which was a cool 155% premium to Tuesday's close of ¥2,215. The stock was limit up today. </li>
<li>It will be limit up tomorrow, and the next day. And probably the next day. </li>
<li>This is a very interesting outcome. But it is actually not as expensive as it "looks."</li>
</ul>


Yesterday, Carlyle announced a buyout of Totoku Electric (5807 JP) at ¥5,660/share, which was a cool 155% premium to Tuesday's close of ¥2,215. The stock was limit up today. 
It will be limit up tomorrow, and the next day. And probably the next day. 
This is a very interesting outcome. But it is actually not as expensive as it "looks."


Super High Premium Buyout for Totoku Electric (5807) By Carlyle

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<div><p>JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div><p>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. </p></div><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. </p></div>

JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. 

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

Japan

Furukawa Electric Co., Ltd. manufactures wires, cables, and metal products. The Company holds patents in optical fiber coating technology and produces optical fiber cables in the United States.  Furukawa Electric's metal products include aluminum cans, air conditioner parts, and shape memory alloys.

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Furukawa Electric (5801 JP)

Furukawa Battery (6937) - Ugly Process in Virtual Take-Under Take-Private

Furukawa Electric is selling Furukawa Battery at weighted average purchase price which is a takeunder. It is a really UGLY calculation/process...

Travis Lundy

Furukawa Battery (6937 JP): Long-Dated Pre-Conditional Offer at JPY1,400

While not a knockout bid, the required minority acceptance rate is not onerous. A long-dated offer presents a free option on a bump due to earnings...

Arun George

Good Morning Japan |SPX Rallies but Uncertainties Remain; NUGGET: 7&I-ValueAct Goes Full John Wick

SPX 0.6% with intraday bounce, with defensives leading the wa. US financial sector lagged due to persisting banking fears; JP inflation 3.1%;...

Mark Chadwick

Super High Premium Buyout for Totoku Electric (5807) By Carlyle

Carlyle launches 155% premium offer to take out wire maker Totoku Electric, buying it from Furukawa. Sounds juicy but it isn't even that expensive....

Travis Lundy

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

We look at the JPX Nikkei 400 Pre-event Rebalance Trade on a monthly basis, checking what is the most likely portfolio as we approach the base date...

Janaghan Jeyakumar, CFA

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