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.

Event-Driven

<ul>
<li>Due to the inability of getting a fair hearing from <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>’s Board, YFO’s strategy now is to replace some of the Board at the June AGM.  </li>
<li>YFO’s <a href="https://prtimes.jp/main/html/rd/p/000000022.000071768.html" target="_blank" rel="noopener">latest press release</a> also catalogues the Board’s shockingly poor corporate governance in relation to its tender offer at JPY1,000. Crucially, a special committee is yet to be formed. </li>
<li>There is no timeline update on the tender which was set to start in late January. YFO continues to maintain that it will not withdraw its proposal.</li>
</ul>


Due to the inability of getting a fair hearing from Toyo Construction (1890 JP)’s Board, YFO’s strategy now is to replace some of the Board at the June AGM.  
YFO’s latest press release also catalogues the Board’s shockingly poor corporate governance in relation to its tender offer at JPY1,000. Crucially, a special committee is yet to be formed. 
There is no timeline update on the tender which was set to start in late January. YFO continues to maintain that it will not withdraw its proposal.


Toyo Construction (1890 JP): YFO Fires Another Salvo at the Board

<ul>
<li>YFO’s <a href="https://prtimes.jp/main/html/rd/p/000000020.000071768.html" target="_blank" rel="noopener">press release</a> alleges the <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> Board will not recommend the tender as YFO is not a suitable owner rather than the JPY,1000 price being too low.</li>
<li>The Board responded that YFO violated the NDA by disclosing the reasons for the Board’s disapproval. This damages the understanding between the parties, an essential precondition to recommending the offer.</li>
<li>The start of the tender has been pushed back to late January 2023. YFO is committed and will not withdraw the offer for any reason that shareholders may consider unreasonable. </li>
</ul>


YFO’s press release alleges the Toyo Construction (1890 JP) Board will not recommend the tender as YFO is not a suitable owner rather than the JPY,1000 price being too low.
The Board responded that YFO violated the NDA by disclosing the reasons for the Board’s disapproval. This damages the understanding between the parties, an essential precondition to recommending the offer.
The start of the tender has been pushed back to late January 2023. YFO is committed and will not withdraw the offer for any reason that shareholders may consider unreasonable. 


Toyo Construction (1890 JP): Pot Shots and Warning Shots

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In March, <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> agreed to be bought out by <a href="https://www.smartkarma.com/entities/infroneer-holdings-inc" target="_blank" data-smartkarma-citation="entities:35785:1" rel="noopener">INFRONEER Holdings (5076 JP)</a> for ¥770/share. One activist objected, and bought 28%. They then said they'd pay ¥1,000.</li>
<li>The Infroneer deal failure started an acrimonious back and forth. The hostility lessened over the summer, but despite activist Yamauchi Family Office's protestations of love, no deal as of November.</li>
<li>Today saw another press release, delaying things. The contents are 🌶🌶🌶.  NOW things are getting more interesting. Hostility is back. Medium-spicy. Three 🌶 out of five.</li>
</ul>


In March, Toyo Construction (1890 JP) agreed to be bought out by INFRONEER Holdings (5076 JP) for ¥770/share. One activist objected, and bought 28%. They then said they'd pay ¥1,000.
The Infroneer deal failure started an acrimonious back and forth. The hostility lessened over the summer, but despite activist Yamauchi Family Office's protestations of love, no deal as of November.
Today saw another press release, delaying things. The contents are 🌶🌶🌶.  NOW things are getting more interesting. Hostility is back. Medium-spicy. Three 🌶 out of five.


Toyo (1890) Says "We Reject". YFO Says "But We Didn't Talk". Medium-🌶🌶🌶 Hostile Activism To Ensue

<ul>
<li>In March 2022, <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> agreed to be taken over by equity affiliate stake owner <a href="https://www.smartkarma.com/entities/infroneer-holdings-inc" target="_blank" data-smartkarma-citation="entities:35785:1" rel="noopener">INFRONEER Holdings (5076 JP)</a> at what was a low price.</li>
<li>Nintendo Founder Family Office "YFO" objected, and bought 25+% of the company, then offered to buy it out 30% higher. Toyo Construction objected.</li>
<li>Four months later they finally signed an NDA and then started negotiating. Early in November the target date for a Tender Offer start by YFO was pushed to early December.</li>
</ul>


In March 2022, Toyo Construction (1890 JP) agreed to be taken over by equity affiliate stake owner INFRONEER Holdings (5076 JP) at what was a low price.
Nintendo Founder Family Office "YFO" objected, and bought 25+% of the company, then offered to buy it out 30% higher. Toyo Construction objected.
Four months later they finally signed an NDA and then started negotiating. Early in November the target date for a Tender Offer start by YFO was pushed to early December.


Toyo Construction (1890) - Creeping Up On The Next "Tender Offer Start Date"..... Uh.... Maybe

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a>'s subsidiary has <a href="https://www3.nhk.or.jp/news/html/20220930/k10013843881000.html" target="_blank" rel="noopener">reportedly</a> filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.</li>
<li>The day after I last wrote, Shinsei <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2022/221003_corporatenameLP_e.pdf" target="_blank" rel="noopener">announced</a> it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.</li>
<li>My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.</li>
</ul>



SBI Holdings (8473 JP)'s subsidiary has reportedly filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.
The day after I last wrote, Shinsei announced it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.
My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.


Thinking Strategically About a Shinsei Position - Things To Do NOW

Japan

INFRONEER Holdings Inc. offers infrastructure construction services. The Company provides energy construction, road construction, airport construction, exhibition hall construction, and more. INFRONEER Holdings also produces construction equipment.

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INFRONEER Holdings (5076 JP)

Toyo Construction (1890 JP): YFO Fires Another Salvo at the Board

While most bidders would have called it a day, YFO is changing tactics but refusing to walk away. At the last close, the gross spread is 12.2%.

Arun George

Toyo Construction (1890 JP): Pot Shots and Warning Shots

Despite the Board's weak excuses for not recommending the offer, YFO remains committed to pushing till the end. The start of the tender has been...

Arun George

Toyo (1890) Says "We Reject". YFO Says "But We Didn't Talk". Medium-🌶🌶🌶 Hostile Activism To Ensue

YFO release another Press Release on Toyo, who apparently told them "No Go". That makes Toyo look bad. YFO went directly to directors. We now have...

Travis Lundy

Toyo Construction (1890) - Creeping Up On The Next "Tender Offer Start Date"..... Uh.... Maybe

YFO's next scheduled "tender start date" is in early December, but the early November update was not exactly bullish on the prospects. They weren't...

Travis Lundy

Thinking Strategically About a Shinsei Position - Things To Do NOW

Shinsei Bank may be in its last throes of independence. Shareholders usually do not get the chance to pester the Board before a price is...

Travis Lundy

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