Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Nec Networks & System Integr / Event-Driven

<ul>
<li>I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>Four new deals this week: <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>'s hostile Offer; <a href="https://www.smartkarma.com/entities/vcredit-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27143:1" rel="noopener">VCredit Holdings Ltd (2003 HK)</a>'s takeunder; <a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>'s Scheme, and <a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a>'s Scheme.</li>
<li>Key updates/news took place on: <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>, <a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a>, and <a href="https://www.smartkarma.com/entities/suntec-reit" target="_blank" data-smartkarma-citation="entities:151:1" rel="noopener">Suntec REIT (SUN SP)</a>.</li>
</ul>


I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Four new deals this week: Makino Milling Machine Co (6135 JP)'s hostile Offer; VCredit Holdings Ltd (2003 HK)'s takeunder; Vesync (2148 HK)'s Scheme, and Pentamaster International (1665 HK)'s Scheme.
Key updates/news took place on: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Nec Networks &amp; System Integr (1973 JP), and Suntec REIT (SUN SP).


(Mostly) Asia-Pac M&A: Makino, Henlius, GAPack, Nec Networks, Suntec REIT, VCredit, Pentamaster

Travis Lundy

<ul>
<li>On Friday, <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC Corp (6701 JP)</a> raised the price for its Tender Offer on <a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a> from ¥3,250 to ¥3,300. </li>
<li>It also lowered the minimum to 10.153mm shares (6.82%). It had proposed to do so earlier but NESIC demanded a bump, and NEC didn't want to. </li>
<li>Now it's bumped. That's the "final price." But it still does not include "a fair allocation of a portion of the value that cannot be realised without an acquisition."
</li>
</ul>


On Friday, NEC Corp (6701 JP) raised the price for its Tender Offer on Nec Networks &amp; System Integr (1973 JP) from ¥3,250 to ¥3,300. 
It also lowered the minimum to 10.153mm shares (6.82%). It had proposed to do so earlier but NESIC demanded a bump, and NEC didn't want to. 
Now it's bumped. That's the "final price." But it still does not include "a fair allocation of a portion of the value that cannot be realised without an acquisition."



NEC Networks (1973 JP) Next To Last Showdown - NEC Lowers Minimum, Bumps Tiny, Ignores Synergies

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks (1973 JP)</a>'s own FA didn't include any measure of transaction synergies to be created about which NEC and NESIC were so sure. This is not being done right.</li>
<li>
<a href="https://www.smartkarma.com/entities/singapore-post-ltd" target="_blank" data-smartkarma-citation="entities:150:1" rel="noopener">Singapore Post (SPOST SP)</a>'s muted price action after announcing the ~S$900mn FMH sale is illustrative. But expect more value to be unlocked from divesting non-core ops going forward. </li>
<li>The FTC' blocking the giant grocery merger of <a href="https://www.smartkarma.com/entities/kroger-co" target="_blank" data-smartkarma-citation="entities:20824:1" rel="noopener">Kroger Co (KR US)</a> and <a href="https://www.smartkarma.com/entities/albertsons-cos-inc" target="_blank" data-smartkarma-citation="entities:33026:1" rel="noopener">Albertsons Cos (ACI US)</a> spells trouble for ACT and <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>.</li>
</ul>



Nec Networks (1973 JP)'s own FA didn't include any measure of transaction synergies to be created about which NEC and NESIC were so sure. This is not being done right.

Singapore Post (SPOST SP)'s muted price action after announcing the ~S$900mn FMH sale is illustrative. But expect more value to be unlocked from divesting non-core ops going forward. 
The FTC' blocking the giant grocery merger of Kroger Co (KR US) and Albertsons Cos (ACI US) spells trouble for ACT and Seven &amp; I Holdings (3382 JP).


Last Week in Event SPACE: NEC Network, SingPost, Seven & I, CPMC, Exedy

<ul>
<li>Yesterday, <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC Corp (6701 JP)</a> extended its Tender Offer to buy controlled subsidiary <a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a> for another 10 days. It did not have enough shares.</li>
<li>As discussed <a href="https://www.smartkarma.com/insights/nec-network-1973-jp-tender-offer-the-landscape-has-fully-changed" target="_blank" rel="noopener">here</a> 4wks ago, then <a href="https://www.smartkarma.com/insights/nec-networks-1973-jp-final-showdown-i-extendy-extendy-but-not-yet-bumpity-bumpity" target="_blank" rel="noopener">here</a> yesterday, NEC might not get enough shares unless it offers a higher price. There's a reason. It is not a high enough price. </li>
<li>METI Fair M&amp;A Guidelines and Guidelines for Corporate Takeovers define fair. Guarantees of a floor price and a fair allocation of synergies. One is questionable. The other is not there.</li>
</ul>


Yesterday, NEC Corp (6701 JP) extended its Tender Offer to buy controlled subsidiary Nec Networks &amp; System Integr (1973 JP) for another 10 days. It did not have enough shares.
As discussed here 4wks ago, then here yesterday, NEC might not get enough shares unless it offers a higher price. There's a reason. It is not a high enough price. 
METI Fair M&amp;A Guidelines and Guidelines for Corporate Takeovers define fair. Guarantees of a floor price and a fair allocation of synergies. One is questionable. The other is not there.


NEC Networks (1973 JP) Final Showdown II - Synergies Not Included, So Fair Value Not Offered

<ul>
<li>Two days before the close of its TOB on subsidiary <a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a>, <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC Corp (6701 JP)</a> announced it had no plans to raise the price. </li>
<li>The next day, the second largest shareholder reported a stake increase from 11.68% to 13.12%. That changes the dynamic further, and a change in terms was likely. </li>
<li>Today post-close, NEC extended the Tender Offer by 10 days. It is worthwhile understanding the likely current disposition of shares. </li>
</ul>


Two days before the close of its TOB on subsidiary Nec Networks &amp; System Integr (1973 JP), NEC Corp (6701 JP) announced it had no plans to raise the price. 
The next day, the second largest shareholder reported a stake increase from 11.68% to 13.12%. That changes the dynamic further, and a change in terms was likely. 
Today post-close, NEC extended the Tender Offer by 10 days. It is worthwhile understanding the likely current disposition of shares. 


NEC Networks (1973 JP) Final Showdown I - Extendy-Extendy, But Not Yet Bumpity Bumpity

Japan

NEC Networks & System Integration Corporation designs, constructs, and maintains communication systems.  The Company's services include system integration services for digital switching, local area network (LAN), and mobile communication systems.  NEC Networks & System Integration also constructs information infrastructure and intelligent building facilities.

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Nec Networks & System Integr (1973 JP)

(Mostly) Asia-Pac M&A: Makino, Henlius, GAPack, Nec Networks, Suntec REIT, VCredit, Pentamaster

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

NEC Networks (1973 JP) Next To Last Showdown - NEC Lowers Minimum, Bumps Tiny, Ignores Synergies

NEC bumped tiny, from ¥3,250 to ¥3,300. More importantly, it lowered the minimum threshold to 10.153mm shares (6.82%) which is likely to succeed...

Travis Lundy

Last Week in Event SPACE: NEC Network, SingPost, Seven & I, CPMC, Exedy

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

NEC Networks (1973 JP) Final Showdown II - Synergies Not Included, So Fair Value Not Offered

NEC extended its TOB for ICT subsidiary NESIC (1973). It wasn't a fair price before. They don't want to raise. They may not get done. This piece...

Travis Lundy

NEC Networks (1973 JP) Final Showdown I - Extendy-Extendy, But Not Yet Bumpity Bumpity

After warning they wouldn't pay more and begging holders to tender, NEC today extended their TOB for NEC Networks. There are 3-4 possible outcomes....

Travis Lundy

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