Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Shinko Electric Industries / Event-Driven

<ul>
<li>Today after the close, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a> offered a progress report on the approvals for the JIC Consortium Tender Offer originally "scheduled" to start in late August 2024.</li>
<li>"Procedures and Steps Necessary under the competition laws of Vietnam and China have not been completed" so the Tender Offeror expects to commence the Tender Offer in/after late January 2025.</li>
<li>The <a href="https://www.shinko.co.jp/english/news/docs/20240826_02.pdf" target="_blank" rel="noopener">announcement</a> appears to suggest no update is likely for another five months or until the Tender Offer starts. That will introduce questions of further delay.</li>
</ul>


Today after the close, Shinko Electric Industries (6967 JP) offered a progress report on the approvals for the JIC Consortium Tender Offer originally "scheduled" to start in late August 2024.
"Procedures and Steps Necessary under the competition laws of Vietnam and China have not been completed" so the Tender Offeror expects to commence the Tender Offer in/after late January 2025.
The announcement appears to suggest no update is likely for another five months or until the Tender Offer starts. That will introduce questions of further delay.


Shinko Electric (6967) Deal Approval Delayed; From Here, Big Gap-, Small Break-, Some Delay-Risk

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/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a> pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The tender start has been delayed from late August to around late January 2025.</li>
<li>The delay was due to outstanding China SAMR and Vietnam regulatory approvals. The stretched timeline suggests that SAMR will likely conditionally approve the deal. </li>
<li>While <a href="https://www.smartkarma.com/entities/ibiden-co-ltd" target="_blank" data-smartkarma-citation="entities:16630:1" rel="noopener">Ibiden Co Ltd (4062 JP)</a>’s underperformance lowers the deal’s break price, timing, not break risk, remains the key concern. At the last close, the gross/annualised spread was 3.7%/7.5%. </li>
</ul>



Shinko Electric Industries (6967 JP) pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The tender start has been delayed from late August to around late January 2025.
The delay was due to outstanding China SAMR and Vietnam regulatory approvals. The stretched timeline suggests that SAMR will likely conditionally approve the deal. 
While Ibiden Co Ltd (4062 JP)’s underperformance lowers the deal’s break price, timing, not break risk, remains the key concern. At the last close, the gross/annualised spread was 3.7%/7.5%. 


Shinko Electric (6967 JP): Tender Start Timelines Delayed

<ul>
<li>When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.</li>
<li>Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was <em>negative</em> as spreads were wide. I reco'd a buy. Then 5mos ago, recommended taking profits.</li>
<li>Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to "expected" start date, so everyone assumes a delay. </li>
</ul>


When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco'd a buy. Then 5mos ago, recommended taking profits.
Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to "expected" start date, so everyone assumes a delay. 


Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher

<ul>
<li>When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.</li>
<li>Nearly 6mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco'd a buy. Then 16+wks ago, recommended taking profits.</li>
<li>Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Gross spread is now 4.6% but time is shorter so annualised is 10+% even out to December launch.</li>
</ul>


When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
Nearly 6mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco'd a buy. Then 16+wks ago, recommended taking profits.
Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Gross spread is now 4.6% but time is shorter so annualised is 10+% even out to December launch.


Shinko Electric (6967) - Break/Gap Risk Early July 2024 Update

<ul>
<li>A Nikkei article today suggested that Fujitsu had granted preferential negotiating rights to buy <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a> to a JIC-led consortium (including DNP and Mitsui Chem) for ~¥800bn.</li>
<li>This happened late in the afternoon session. Shares spiked 5+%, then were halted. A gray market ensued. </li>
<li>A Bloomberg article provided more info, and the same info nuanced slightly differently. The wording in yet other articles was interesting enough that it is worth discussing. </li>
</ul>


A Nikkei article today suggested that Fujitsu had granted preferential negotiating rights to buy Shinko Electric Industries (6967 JP) to a JIC-led consortium (including DNP and Mitsui Chem) for ~¥800bn.
This happened late in the afternoon session. Shares spiked 5+%, then were halted. A gray market ensued. 
A Bloomberg article provided more info, and the same info nuanced slightly differently. The wording in yet other articles was interesting enough that it is worth discussing. 


JIC Consortium Possibly In Line to Win Shinko At "¥800bn", Which Makes You Go 🤔...

Japan

SHINKO ELECTRIC INDUSTRIES CO., LTD. designs, manufactures, and markets advanced electronic materials, such as semiconductor packages, including leadframes, and PLP(Plastics Laminated Packages).  The Company markets its products worldwide through a network of sales offices in such places as the Philippines, Germany, and Hong Kong.

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Shinko Electric Industries (6967 JP)

Shinko Electric (6967) Deal Approval Delayed; From Here, Big Gap-, Small Break-, Some Delay-Risk

The Shinko Electric Tender start has been delayed by lack of approval from Vietnam and China. China was expected. Now we wait to Jan-25? I see...

Travis Lundy

Shinko Electric (6967 JP): Tender Start Timelines Delayed

The stretched timeline suggests that SAMR will likely conditionally approve the deal. Timing, not break risk, remains the key concern. At the last...

Arun George

Update: Shinko Electric (6967) Shorter-Dated and Break Risk Small but GAP RISK Now Much Higher

In the recent market downturn, Ibiden has sharply underperformed Shinko Electric. There may be no new BREAK RISK but GAP RISK in case of break is...

Travis Lundy

Shinko Electric (6967) - Break/Gap Risk Early July 2024 Update

Shinko Gap Risk is probably slightly higher than last month as gross arb return starts to drop as this deal becomes a short-timer (one hopes)....

Travis Lundy

JIC Consortium Possibly In Line to Win Shinko At "¥800bn", Which Makes You Go 🤔...

News out today suggests JIC with DNP and Mitsui Chem could win the deal for Shinko Electric. BBG suggests a deal by end of week. Optically, it...

Travis Lundy

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