Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A variety of articles of recent from private media sources have suggested that <a href="https://www.smartkarma.com/entities/teijin-ltd" target="_blank" data-smartkarma-citation="entities:5097:1" rel="noopener">Teijin Ltd (3401 JP)</a> has its 55% stake in <a href="https://www.smartkarma.com/entities/infocom-corp" target="_blank" data-smartkarma-citation="entities:8412:1" rel="noopener">Infocom Corp (4348 JP)</a> up for auction. </li>
<li>According to earlier articles, binding Second Round bids were due last week. According to an article out late last week, binding bids have been made, with some "around ¥250bn."</li>
<li>What that means for price may depend on what the "around ¥250bn" means. A brief exploration below. </li>
</ul>


A variety of articles of recent from private media sources have suggested that Teijin Ltd (3401 JP) has its 55% stake in Infocom Corp (4348 JP) up for auction. 
According to earlier articles, binding Second Round bids were due last week. According to an article out late last week, binding bids have been made, with some "around ¥250bn."
What that means for price may depend on what the "around ¥250bn" means. A brief exploration below. 


Infocom (4348 JP) - The Meaning of 'Binding Bids' and '¥250bn'

<ul>
<li>After 3D Investment Partners bought a large slug of <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> in early 2022, the company started a review of governance and capital allocation. </li>
<li>The company updated investors in August, and bought in 4 listed subs in November-December 2023. The August update suggested a Q1 2024 decision on use/ownership of real estate.</li>
<li>The Final Report is due in a month. In the meantime, the stock rallied Friday off a news article suggesting the Board was reviewing take-private proposals. Yes, but...</li>
</ul>


After 3D Investment Partners bought a large slug of Fuji Soft Inc (9749 JP) in early 2022, the company started a review of governance and capital allocation. 
The company updated investors in August, and bought in 4 listed subs in November-December 2023. The August update suggested a Q1 2024 decision on use/ownership of real estate.
The Final Report is due in a month. In the meantime, the stock rallied Friday off a news article suggesting the Board was reviewing take-private proposals. Yes, but...


Fuji Soft (9749) - Much Better Governance Process But The Stock Has Run Too Far

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/itochu-techno-solutions-corp" target="_blank" data-smartkarma-citation="entities:2431:1" rel="noopener">Itochu Techno Solutions (4739 JP)</a> has recommended <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>’s tender offer of JPY4,325 per share, an 18.7% premium to the undisturbed price (1 August).</li>
<li>The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 5.43% ownership ratio.</li>
<li>The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year share price high.</li>
</ul>



Itochu Techno Solutions (4739 JP) has recommended Itochu Corp (8001 JP)’s tender offer of JPY4,325 per share, an 18.7% premium to the undisturbed price (1 August).
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 5.43% ownership ratio.
The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year share price high.


ITOCHU Techno-Solutions (4739 JP): ITOCHU's JPY4,325 Tender Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kanematsu-electronics-ltd" target="_blank" data-smartkarma-citation="entities:15767:1" rel="noopener">Kanematsu Electronics (8096 JP)</a> has recommended <a href="https://www.smartkarma.com/entities/kanematsu-corp" target="_blank" data-smartkarma-citation="entities:5810:1" rel="noopener">Kanematsu Corp (8020 JP)</a>’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).</li>
<li>The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.</li>
<li>The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. </li>
</ul>



Kanematsu Electronics (8096 JP) has recommended Kanematsu Corp (8020 JP)’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. 


Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

Equity Bottom-Up

<ul>
<li>On 28 April 2022, with full-year earnings, <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a> announced a buyback programme to buy back up to 12mm shares (6.11% of shares out) for up to ¥150bn</li>
<li>That was when the shares were ¥18,540. The shares popped 10% in 2 days. Then fell 25% into end-September. Yesterday, they announced they'd bought back 1.9mm shares in November.</li>
<li>Those were the first shares bought back under the Programme. And that leaves 4 months and a lot of stock to buy. </li>
</ul>


On 28 April 2022, with full-year earnings, Fujitsu Ltd (6702 JP) announced a buyback programme to buy back up to 12mm shares (6.11% of shares out) for up to ¥150bn
That was when the shares were ¥18,540. The shares popped 10% in 2 days. Then fell 25% into end-September. Yesterday, they announced they'd bought back 1.9mm shares in November.
Those were the first shares bought back under the Programme. And that leaves 4 months and a lot of stock to buy. 


Fujitsu (6702) Buyback Just Getting Started

Japan

Net One Systems Co., Ltd. designs, installs, maintains and supports computer network systems.  The company also installs computer security related products and integrated audio visual data communication environment system by applying IP (Internet Protocol) technology.  Net One Systems builds virtualized data center environment as well.

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Net One Systems (7518 JP)

Infocom (4348 JP) - The Meaning of 'Binding Bids' and '¥250bn'

Infocom has run 50% in a month since we learned Sony might bid against PE firms to take the co private. If one looks at this as SOTP, it's...

Travis Lundy

Fuji Soft (9749) - Much Better Governance Process But The Stock Has Run Too Far

Fuji Soft rallied 9% Friday after reaching a near-all-time high on Thursday. A Nikkei article hinted the Board was considering PE Firms' take...

Travis Lundy

ITOCHU Techno-Solutions (4739 JP): ITOCHU's JPY4,325 Tender Offer

The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year...

Arun George

Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal.

Arun George

Fujitsu (6702) Buyback Just Getting Started

Fujitsu announced their buyback many months ago (late April 2022) but bought nothing til last month when they were 15%. Expect 11-15% of volume...

Travis Lundy

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