Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/kadokawa-corp" target="_blank" data-smartkarma-citation="entities:4152:1" rel="noopener">Kadokawa (9468 JP)</a> <a href="https://ssl4.eir-parts.net/doc/9468/ir_material7/242676/00.pdf" target="_blank" rel="noopener">announced</a> it would sell ¥50bn of shares to <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony (6758 JP)</a> in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.</li>
<li>40% of proceeds is to "create and develop new IP", 60% is to "enhance global IP distribution"; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason. </li>
<li>Kadokawa shares have gained 44% in a month since Reuters carried an "Exclusive" article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.</li>
</ul>


Today, Kadokawa (9468 JP) announced it would sell ¥50bn of shares to Sony (6758 JP) in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.
40% of proceeds is to "create and develop new IP", 60% is to "enhance global IP distribution"; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason. 
Kadokawa shares have gained 44% in a month since Reuters carried an "Exclusive" article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.


Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

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/kadokawa-dwango-corp" target="_blank" data-smartkarma-citation="entities:4152:1" rel="noopener">Kadokawa Dwango (9468 JP)</a> shares rose 16% after <a href="https://www.reuters.com/markets/deals/sony-talks-buy-media-powerhouse-behind-elden-ring-sources-say-2024-11-19/" target="_blank" rel="noopener">Reuters reported</a> that <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> is in talks to acquire it. Kadokawa confirmed an initial letter of intent. </li>
<li>The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.</li>
<li>The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.</li>
</ul>



Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent. 
The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.


Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

David Blennerhassett

<ul>
<li>The new article on <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> from TV Tokyo is causing a dip on top of last week's weakness. This is a dip to buy.</li>
<li>
<a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a>'s Offer is now open for tendering. Ignore the rumours. Zhang Wei will tender. Expect payment before Chinese New Year. </li>
<li>Accounting solely for the pre-IPO investors, 164.6m shares (US$1.9bn) in <a href="https://www.smartkarma.com/entities/ubtech-robotics-limited" target="_blank" data-smartkarma-citation="entities:36469:1" rel="noopener">UBTech Robotics (9880 HK)</a> will be unlocked, ~39.2% of the firm’s total shares outstanding, and 91 days of three-month ADV.</li>
</ul>


The new article on Seven &amp; I Holdings (3382 JP) from TV Tokyo is causing a dip on top of last week's weakness. This is a dip to buy.

CPMC Holdings (906 HK)'s Offer is now open for tendering. Ignore the rumours. Zhang Wei will tender. Expect payment before Chinese New Year. 
Accounting solely for the pre-IPO investors, 164.6m shares (US$1.9bn) in UBTech Robotics (9880 HK) will be unlocked, ~39.2% of the firm’s total shares outstanding, and 91 days of three-month ADV.


Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>The Nikkei 225 ended the week down 1.9% at 38,701, with investors cautious ahead of key central bank decisions</li>
<li>The Bank of Japan kept interest rates steady at 0.25% on Thursday, deferring potential rate hikes amidst global economic uncertainty</li>
<li>Nissan's stock surged +24% this week following reports of potential merger talks with Honda and Mitsubishi Motors.</li>
</ul>


The Nikkei 225 ended the week down 1.9% at 38,701, with investors cautious ahead of key central bank decisions
The Bank of Japan kept interest rates steady at 0.25% on Thursday, deferring potential rate hikes amidst global economic uncertainty
Nissan's stock surged +24% this week following reports of potential merger talks with Honda and Mitsubishi Motors.


Japan Weekly | Nikkei Slides Amid Cautious Sentiment; Nissan, Park24, Kadokawa

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  </li>
<li>The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.</li>
<li>A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. </li>
</ul>


On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  
The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.
A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. 


Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Japan

Kadokawa Corporation operates as a publishing company. The Company provides books publication, magazines publication, and other services. Kadokawa also operates video making, network entertainment designing, and other businesses.

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Kadokawa (9468 JP)

Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

After ugly news in the recent past, and earnings guidance lowered, an article mid-Nov24 suggested SONY was in talks to buy Kadokawa. Today we find...

Travis Lundy

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

While an acquisition has a strong strategic rationale, the upside is limited as the last close reflects a significant takeover premium. There is a...

Arun George

Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Japan Weekly | Nikkei Slides Amid Cautious Sentiment; Nissan, Park24, Kadokawa

Investors cautious as Nikkei 225 drops 1.9% ahead of central bank decisions, while Nissan's stock surges 24% on merger talks with Honda and...

Mark Chadwick

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Shift Up announced that it will be postponing its IPO to July. A major investment positive is the enormous initial success of Stellar Blade which...

Douglas Kim

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Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

After ugly news in the recent past, and earnings guidance lowered, an article mid-Nov24 suggested SONY was in talks to buy Kadokawa. Today we find...

Travis Lundy

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

While an acquisition has a strong strategic rationale, the upside is limited as the last close reflects a significant takeover premium. There is a...

Arun George

Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Japan Weekly | Nikkei Slides Amid Cautious Sentiment; Nissan, Park24, Kadokawa

​Investors cautious as Nikkei 225 drops 1.9% ahead of central bank decisions, while Nissan's stock surges 24% on merger talks with Honda and...

Mark Chadwick

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Shift Up announced that it will be postponing its IPO to July. A major investment positive is the enormous initial success of Stellar Blade which...

Douglas Kim

Investors cautious as Nikkei 225 drops 1.9% ahead of central bank decisions, while Nissan's stock surges 24% on merger talks with Honda and...