Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing Inc (2427 JP)</a> has been an "interesting" risk arb situation. It was launched as a Cheeky, Opportunistic, Low-Priced MBO. Some bumps after launch turned out to be BAU.</li>
<li>The stock has not traded above terms since early on in the trade. I expect people are happy to get out. But there is ANOTHER ARB to do here.</li>
<li>The OTHER ARB is something quite particular to high float, low activism risk arb trades. In some ways better than the traditional arb, but it has some risks.</li>
</ul>



Outsourcing Inc (2427 JP) has been an "interesting" risk arb situation. It was launched as a Cheeky, Opportunistic, Low-Priced MBO. Some bumps after launch turned out to be BAU.
The stock has not traded above terms since early on in the trade. I expect people are happy to get out. But there is ANOTHER ARB to do here.
The OTHER ARB is something quite particular to high float, low activism risk arb trades. In some ways better than the traditional arb, but it has some risks.


Outsourcing (2427) - The OTHER Arb - That One Neat Trick And Its Weird Risks

<ul>
<li>After an extension due to a European Foreign Subsidies Review filing, and a small 'accident' regarding the earnings release, we have a deal. </li>
<li>The earnings release itself seemed more innocuous than articles and rumour suggested show the causes of impairments and so it seemed like there was little cause to walk/declare MAC.</li>
<li>Now it will be done in 20 days. I still think this is cheeky, opportunistic, and low, and it is up to the float to decide what to do.</li>
</ul>


After an extension due to a European Foreign Subsidies Review filing, and a small 'accident' regarding the earnings release, we have a deal. 
The earnings release itself seemed more innocuous than articles and rumour suggested show the causes of impairments and so it seemed like there was little cause to walk/declare MAC.
Now it will be done in 20 days. I still think this is cheeky, opportunistic, and low, and it is up to the float to decide what to do.


Outsourcing (2427) MBO Arrives! Bain Launches Cheeky, Opportunistic, Low(Priced) TOB

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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<ul>
<li>
<a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing Inc (2427 JP)</a> announced that the pre-condition was satisfied, and Bain’s tender offer remains unchanged at JPY1,755 per share, a 52.1% premium to the undisturbed (8 December).</li>
<li>Shareholders will breathe a sigh of relief as the weak 4Q and significant impairments have raised concerns that Bain would cut its offer or walk away.</li>
<li>The offer attractiveness has increased partly due to lower consensus. At the last close and for a 3 April payment, the gross/annualised spread is 2.0%/22.8%.</li>
</ul>



Outsourcing Inc (2427 JP) announced that the pre-condition was satisfied, and Bain’s tender offer remains unchanged at JPY1,755 per share, a 52.1% premium to the undisturbed (8 December).
Shareholders will breathe a sigh of relief as the weak 4Q and significant impairments have raised concerns that Bain would cut its offer or walk away.
The offer attractiveness has increased partly due to lower consensus. At the last close and for a 3 April payment, the gross/annualised spread is 2.0%/22.8%.


Outsourcing (2427 JP): Relief as Bain Launches Tender at Unchanged Terms

David Blennerhassett

<ul>
<li>There is no suggestion of precondition breach attached to <a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing Inc (2427 JP)</a>'s impairment losses. </li>
<li>Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral (BLD AU)</a>, with certain tendering thresholds triggering more cash.</li>
<li>
<a href="https://www.smartkarma.com/entities/itoki-corp" target="_blank" data-smartkarma-citation="entities:18032:1" rel="noopener">Itoki Corp (7972 JP)</a>'s mega ToSTNeT-3 buyback is now done.</li>
</ul>


There is no suggestion of precondition breach attached to Outsourcing Inc (2427 JP)'s impairment losses. 
Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in Boral (BLD AU), with certain tendering thresholds triggering more cash.

Itoki Corp (7972 JP)'s mega ToSTNeT-3 buyback is now done.


Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

<ul>
<li>
<a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing Inc (2427 JP)</a> delayed its earnings from 14 February to 19 February on tardiness in calculating impairment losses. That caused a short sharp shock in share price.</li>
<li>An article came out suggesting it was a small number, and domestic biz EAS-related. Results today do not suggest EAS-related, and half is overseas. But no suggestion of precondition breach.</li>
<li>For that, I think this probably goes through, and the EC FSR review period should end on 20 Feb so a deal announcement by Friday is eminently possible.</li>
</ul>



Outsourcing Inc (2427 JP) delayed its earnings from 14 February to 19 February on tardiness in calculating impairment losses. That caused a short sharp shock in share price.
An article came out suggesting it was a small number, and domestic biz EAS-related. Results today do not suggest EAS-related, and half is overseas. But no suggestion of precondition breach.
For that, I think this probably goes through, and the EC FSR review period should end on 20 Feb so a deal announcement by Friday is eminently possible.


Outsourcing (2427 JP) - Earnings Out, With a Bigger Impairment, But Not Clearly A MAC

Japan

OUTSOURCING Inc. provides outsourcing services for manufacturing companies. The Company mainly provides services for industries such as food, electric equipment, transport machine, chemical, and metal.  Outsourcing also provides worker dispatching service.

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Outsourcing Inc (2427 JP)

Outsourcing (2427) - The OTHER Arb - That One Neat Trick And Its Weird Risks

The Outsourcing Tender Offer closes in 13 days. If you buy 15 March, you have 19 days of funding for ¥5/share (0.286%). The OTHER ARB will likely...

Travis Lundy

Outsourcing (2427) MBO Arrives! Bain Launches Cheeky, Opportunistic, Low(Priced) TOB

The Outsourcing (2427) MBO is on. It's cheap, opportunistic, cheeky, unfortunate. Growth should come at a higher multiple. Synergies should too....

Travis Lundy

Outsourcing (2427 JP): Relief as Bain Launches Tender at Unchanged Terms

Shareholders will breathe a sigh of relief at the unchanged terms. At the last close and for a 3 April payment, the gross/annualised spread is 2.0%...

Arun George

Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Outsourcing (2427 JP) - Earnings Out, With a Bigger Impairment, But Not Clearly A MAC

Outsourcing earnings saw a big impairment loss set of numbers. But nothing in the numbers or explanation suggests that pre-conditions are breached....

Travis Lundy

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