Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This week will see the Shinsei shareholder vote regarding the Poison Pill which will determine whether SBI's Tender Offer to get to 48% will go forward.</li>
<li>Murakami-San and entities own 7.43% of shares out (and 9.16% of voting rights) as of 12 November. </li>
<li>His now-large presence in the shareholder register makes a post-vote outcome much more interesting. </li>
</ul>


This week will see the Shinsei shareholder vote regarding the Poison Pill which will determine whether SBI's Tender Offer to get to 48% will go forward.
Murakami-San and entities own 7.43% of shares out (and 9.16% of voting rights) as of 12 November. 
His now-large presence in the shareholder register makes a post-vote outcome much more interesting. 


Shinsei TOB & Poison Pill - Murakami-San's Presence Makes Things Complicated, But in a FUN 🦄 Way

<ul>
<li>The Deposit Insurance Corporation of Japan, which owns 23.3% of voting rights in <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> asked both SBI and Shinsei to provide answers to questions by 12 November</li>
<li>They both did on Friday and the answers were curiously lacklustre. If one of the two 'won' it may have been SBI. But we don't know what DICJ will do.</li>
<li>In other news, Shinsei reported results and a famous activist announced a 5+% stake.</li>
</ul>


The Deposit Insurance Corporation of Japan, which owns 23.3% of voting rights in Shinsei Bank (8303 JP) asked both SBI and Shinsei to provide answers to questions by 12 November
They both did on Friday and the answers were curiously lacklustre. If one of the two 'won' it may have been SBI. But we don't know what DICJ will do.
In other news, Shinsei reported results and a famous activist announced a 5+% stake.


SBI and Shinsei Responses to the DICJ and an Activist Joins the Party

David Blennerhassett

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This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.
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I number 49, mostly firm, deals around the region.
</div>
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More below the fold.
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This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.


I number 49, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: Afterpay, Link Admin, Razer, AusNet, First Service

There is an interesting <a href="https://www.zaikai.jp/articles/detail/1046" target="_blank" rel="noopener">article</a> out in Zaikai Online (財界オンライン zaikai.jp) today which talks about the possibility of how the FSA might vote in the <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> EGM which comes in just under three weeks.
The two government entities which own the stock are the Resolution &amp; Collection Corporation (RCC) which owns 26.912mm shares, and the Deposit Insurance Corporation of Japan (DICJ), which owns 20.00mm shares. Together their 46.912mm shares are worth about 22.31% of voting rights, which is a bit more than the total owned by <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> which is opposing the poison pill to be voted on at the EGM. 
The FSA will be the decision-maker on the vote as the DICJ is an FSA entity and the RCC is a subsidiary of a subsidiary of the DICJ. 
I discussed the possible outcomes for tendering by the government entities in <a href="https://www.smartkarma.com/insights/sbi-8473-launches-a-hostile-tender-offer-on-shinsei-bank-8303" target="_blank" data-smartkarma-citation="insights:57426" rel="noopener">SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)!</a> and I discussed the possibilities of how they might vote for a poison pill in <a href="https://www.smartkarma.com/insights/shinsei-looks-to-a-poison-pill-but-probably-not-really" target="_blank" data-smartkarma-citation="insights:57630" rel="noopener">Shinsei Looks To A Poison Pill, But Probably Not Really</a>. 
The tone of the article linked above is interesting. I think worth taking another look. 
Late today, Japanese news agency Jiji reported that US-based international proxy advisor Glass Lewis came out in support of the Poison Pill at the Shinsei EGM. This surprised the market and shares - which had been trading in the ¥1,860-1,870/share range after last week's large TOPIX and JPX Nikkei 400 index down-weight fell sharply - ending the day down more than 3% - a big move for a risk arb situation.
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While the Glass Lewis and ISS voting guidelines suggest that they generally vote against Poison Pills, there are conditions under which they could support. They don't say they will endorse a poison pill if managements do meet those hurdles, just that they could not support if they don't. Shinsei's poison pill plan met all those hurdles as it proposed in its 21 October 2021 <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/211021_announcement1_e.pdf" target="_blank" rel="noopener">document</a> (p27-28) where it came out against the SBI Tender Offer, officially. 
I had not expected Glass Lewis or ISS to endorse the Poison Pill but it was not a slam dunk they would knock it back. IF the proxy advisors knocked it back, it was a high probability event that the Poison Pill would get voted down.
The result of the EGM might be less assured now that Glass Lewis has supported. But it is complicated. The result of the EGM could have effects on future buybacks, future index events, and profitability, and the way the shares move prior to the EGM could affect how people vote at the EGM. The shares at ¥1650 might trigger a different decision than the shares at ¥1,900.
Much more discussion below the fold. 

</section>

There is an interesting article out in Zaikai Online (財界オンライン zaikai.jp) today which talks about the possibility of how the FSA might vote in the Shinsei Bank (8303 JP) EGM which comes in just under three weeks.
The two government entities which own the stock are the Resolution &amp; Collection Corporation (RCC) which owns 26.912mm shares, and the Deposit Insurance Corporation of Japan (DICJ), which owns 20.00mm shares. Together their 46.912mm shares are worth about 22.31% of voting rights, which is a bit more than the total owned by SBI Holdings (8473 JP) which is opposing the poison pill to be voted on at the EGM. 
The FSA will be the decision-maker on the vote as the DICJ is an FSA entity and the RCC is a subsidiary of a subsidiary of the DICJ. 
I discussed the possible outcomes for tendering by the government entities in SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)! and I discussed the possibilities of how they might vote for a poison pill in Shinsei Looks To A Poison Pill, But Probably Not Really. 
The tone of the article linked above is interesting. I think worth taking another look. 
Late today, Japanese news agency Jiji reported that US-based international proxy advisor Glass Lewis came out in support of the Poison Pill at the Shinsei EGM. This surprised the market and shares - which had been trading in the ¥1,860-1,870/share range after last week's large TOPIX and JPX Nikkei 400 index down-weight fell sharply - ending the day down more than 3% - a big move for a risk arb situation.


While the Glass Lewis and ISS voting guidelines suggest that they generally vote against Poison Pills, there are conditions under which they could support. They don't say they will endorse a poison pill if managements do meet those hurdles, just that they could not support if they don't. Shinsei's poison pill plan met all those hurdles as it proposed in its 21 October 2021 document (p27-28) where it came out against the SBI Tender Offer, officially. 
I had not expected Glass Lewis or ISS to endorse the Poison Pill but it was not a slam dunk they would knock it back. IF the proxy advisors knocked it back, it was a high probability event that the Poison Pill would get voted down.
The result of the EGM might be less assured now that Glass Lewis has supported. But it is complicated. The result of the EGM could have effects on future buybacks, future index events, and profitability, and the way the shares move prior to the EGM could affect how people vote at the EGM. The shares at ¥1650 might trigger a different decision than the shares at ¥1,900.
Much more discussion below the fold. 



Further Shinsei Complications: Glass Lewis Endorses the Poison Pill. Will the FSA Vote?

<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> reported earnings after the close of 28 October. Earnings were high, and ROE achieved a record high. There was considerable good news in the results, but results were largely as expected and the stock price didn't do much. 
Most notable, I thought, in the analyst meeting afterwards was a barrage of comments about <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> seemingly meant to embarrass and disparage Shinsei senior management, and possibly the entire Shinsei management layer.
He likened the fact that Shinsei had not repaid public monies this long after the injection/conversion to "theft" and spent considerable time comparing apples to bananas.
It was not encouraging. Furthermore, he also said that he was "overpaying" at ¥2,000 and had no intention of raising his price. 
The entire call was interesting, and aggressive, and you can find the call and transcript  on Smartkarma <a href="https://www.smartkarma.com/entities/sbi-holdings-inc/events?item=7805" target="_blank" rel="noopener">here</a>. 
More below the fold.

SBI Holdings (8473 JP) reported earnings after the close of 28 October. Earnings were high, and ROE achieved a record high. There was considerable good news in the results, but results were largely as expected and the stock price didn't do much. 
Most notable, I thought, in the analyst meeting afterwards was a barrage of comments about Shinsei Bank (8303 JP) seemingly meant to embarrass and disparage Shinsei senior management, and possibly the entire Shinsei management layer.
He likened the fact that Shinsei had not repaid public monies this long after the injection/conversion to "theft" and spent considerable time comparing apples to bananas.
It was not encouraging. Furthermore, he also said that he was "overpaying" at ¥2,000 and had no intention of raising his price. 
The entire call was interesting, and aggressive, and you can find the call and transcript  on Smartkarma here. 
More below the fold. 

Aggressive Commentary by SBI About Shinsei at Earnings

Japan

SBI Shinsei Bank, Ltd. provides banking services including deposits, loans, and foreign exchange transaction, as well as investment trust service and issuance of long-term bonds.

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SBI Shinsei Bank (8303 JP)

Shinsei TOB & Poison Pill - Murakami-San's Presence Makes Things Complicated, But in a FUN 🦄 Way

The Shinsei EGM is on the 25th. The Poison Pill looks like it is under threat if the DICJ doesn't take sides, which leaves an interesting outcome...

Travis Lundy

SBI and Shinsei Responses to the DICJ and an Activist Joins the Party

SBI & Shinsei both responded to the DICJ's questions, and curiously both come up with similar March 2025 profit expectations. It's not clear how...

Travis Lundy

Asia-Pac Weekly Risk Arb Summary: Afterpay, Link Admin, Razer, AusNet, First Service

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

Further Shinsei Complications: Glass Lewis Endorses the Poison Pill. Will the FSA Vote?

Things are getting complicated further. The FSA is mulling how to vote and Glass Lewis has decided to support the poison pill. Where to price the...

Travis Lundy

Aggressive Commentary by SBI About Shinsei at Earnings

SBI reported on Oct28. CEO Kitao-san hosted the call, aggressively disparaging Shinsei mgmt, comparing Shinsei to comps negatively (mostly apples...

Travis Lundy

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