IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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.

Event-Driven

Taisho Pharmaceutical Holdin / Event-Driven

<ul>
<li>Japan Catalyst’s <a href="https://www.japancatalyst.com/pdf/JCI_TAISHO_20231201_eng.pdf" target="_blank" rel="noopener">press release</a> supports the idea of a <a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdin (4581 JP)</a> MBO but not the proposed offer price as it implies a P/B less than 1.0x.</li>
<li>The press release is a discovery exercise encouraging other like-minded shareholders to show their hand. The shares are trading marginally above the JPY8,620 offer.</li>
<li>While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5% premium to the undisturbed price.</li>
</ul>


Japan Catalyst’s press release supports the idea of a Taisho Pharmaceutical Holdin (4581 JP) MBO but not the proposed offer price as it implies a P/B less than 1.0x.
The press release is a discovery exercise encouraging other like-minded shareholders to show their hand. The shares are trading marginally above the JPY8,620 offer.
While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5% premium to the undisturbed price.


Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Japan Catalyst Fund is a relatively young effort in the Japan "engagement activism" space, having been founded by Monex Group in September 2019. Total assets remain apparently small.</li>
<li>Championed by Monex Group founder Oki Matsumoto, despite small AUM, the fund has decent access. As of end-October, <a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdings (4581 JP)</a> was #5 and 5.26%. Now it's #2.</li>
<li>Friday, they released a statement about the MBO. It isn't a barn-burner, but the stock has traded through terms since announcement at a too-low price. And nobody else has commented.</li>
</ul>


Japan Catalyst Fund is a relatively young effort in the Japan "engagement activism" space, having been founded by Monex Group in September 2019. Total assets remain apparently small.
Championed by Monex Group founder Oki Matsumoto, despite small AUM, the fund has decent access. As of end-October, Taisho Pharmaceutical Holdings (4581 JP) was #5 and 5.26%. Now it's #2.
Friday, they released a statement about the MBO. It isn't a barn-burner, but the stock has traded through terms since announcement at a too-low price. And nobody else has commented.


Japan Activism:  Japan Catalyst Fund Calls Out Taisho Pharma Committee on MBO Price

David Blennerhassett

<ul>
<li>For the month of November 2023, 16 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$13bn.</li>
<li>The average premium for the new deals announced (or first discussed) in November was 41%. The average YTD is 38% (97 deals).</li>
<li>This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of November 2023, 16 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$13bn.
The average premium for the new deals announced (or first discussed) in November was 41%. The average YTD is 38% (97 deals).
This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, Nov 2023: Taisho Pharma, CIMC Vehicle, CMIC, Japan Best Rescue, Shidax

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdin (4581 JP)</a> has recommended an MBO tender offer of JPY8,620 per share, a 55.5% premium to the undisturbed (24 November). </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 66.67% ownership ratio.</li>
<li>Irrevocables represent a 40.31% ownership ratio. The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.</li>
</ul>



Taisho Pharmaceutical Holdin (4581 JP) has recommended an MBO tender offer of JPY8,620 per share, a 55.5% premium to the undisturbed (24 November). 
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 66.67% ownership ratio.
Irrevocables represent a 40.31% ownership ratio. The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.


Taisho Pharmaceutical (4581 JP): MBO Tender Offer at JPY8,620

<ul>
<li>Just past the 22-year anniversary of the deal-break from a previous takeover involving the large OTC drug firm, <a href="https://www.smartkarma.com/entities/taisho-pharmaceutical-holdin" target="_blank" data-smartkarma-citation="entities:3774:1" rel="noopener">Taisho Pharmaceutical Holdin (4581 JP)</a> announced an MBO Takeover for the company.</li>
<li>Set at a 55.5% premium, it is not particularly surprising as a deal. The family is rolling in their interests. It looks like estate planning. The Board supports and recommends. </li>
<li>Unfortunately, like many recent MBOs, this one is light at 0.85 book where net cash, securities, and net receivables and inventory make up 68% of the takeover price. </li>
</ul>


Just past the 22-year anniversary of the deal-break from a previous takeover involving the large OTC drug firm, Taisho Pharmaceutical Holdin (4581 JP) announced an MBO Takeover for the company.
Set at a 55.5% premium, it is not particularly surprising as a deal. The family is rolling in their interests. It looks like estate planning. The Board supports and recommends. 
Unfortunately, like many recent MBOs, this one is light at 0.85 book where net cash, securities, and net receivables and inventory make up 68% of the takeover price. 


Taisho Pharma (4581 JP) - Japan's Newest Biggest MBO; The Price Is Light!

Japan

Taisho Pharmaceutical Holdings Company Ltd. produces and sells pharmaceuticals, foods, and other related products. The Company also provides insurance and information processing services and operates hotel businesses.

MEDRx Co Ltd., is a pharmaceutical company. The Company develops medicines for the pharmaceutical industry based on drug formulation technologies required for Drug Delivery Systems.

Nippon Chemiphar Co., Ltd. produces and sells medicine for medical use.  The Company also produces medical, health, and cosmetics products.  Nippon Chemiphar sterilizes medical instruments for hospitals and operates nursing home for elderly.

WAKAMOTO PHARMACEUTICAL CO., LTD. produces and sells prescription and generic drug.  The Company's products include vitamins, external medicine, toothpaste and toothbrushes, and drugs for digestive organs.

RaQualia Pharma, Inc. is a pharmaceutical company. The Company develops compounds for patient studies and sells drugs to pharmaceutical manufacturers. RaQualia also provides research on remedies in gastrointestinal, liver diseases, and pain in general areas.

Symbio Pharmaceuticals Limited develops and commercializes prescription drugs n oncology, hematology and auto-immune disease for Japan and other Asia Pacific markets.

Taiko Pharmaceutical Co Ltd is a pharmaceutical company that manufactures and sells gastrointestinal pharmaceuticals and general use pharmaceutical products.

Fuso Pharmaceutical Industries, Ltd. produces and sells pharmaceuticals and medical equipment.  The Company's main products are transfusion fluid and artificial kidney dialysis fluid.  Fuso Pharmaceutical Industries also leases real estate properties and operates bowling places.

Daito Pharmaceutical Co Ltd. is a pharmaceutical company. The Company manufactures generic formulations as well as supplies APIs for generic products to generic marketers. Daito serves a broad range of clients including generic medicine suppliers, ethical prescription pharmaceutical companies, healthcare products companies and home delivery medicines groups.

Fuji Pharma Co., Ltd. manufactures and markets generic drugs.  The Company produces hormone agents for the obstetrics and gynecology fields, and chemicals for x-rays and infectious disease diagnosis kits.  Fuji Pharmaceutical also provides pharmaceutical information on after-market research and the effectiveness and safety of medications.

Pharmesis International Limited is a pharmaceutical company that produces western and traditional chinese medicine products. The Company's products are in the form of tablets and granules. Pharmesis sells its products through wholesalers to hospitals via sales and marketing networks.

Rhinomed Ltd. is a medical technology company.  The Company is focused on developing nasal, respiratory and nasal drug delivery technologies.

Zelira Therapeutics Limited operates as a global therapeutic medicinal cannabis company. The Company focussed on developing branded cannabis products for the treatment of a variety of medical conditions.. Zelira Therapeutics serves customers in Australia and the United States.

PT Merck Sharp Dohme Pharma Tbk manufactures and sells a variety of pharmaceutical and household products.  The Company produces medicines for humans and animals, toiletries, cosmetics, household cleaners, and related products.

Suntar Eco-City Ltd. sold its operating subsidiary.  The Company is exploring new business ventures.

Sanai Health Industry Group Company Limited operates as a drug products manufacturing company. The Company develops and markets western pharmaceutical products, modern Chinese medicine products, over the counter drugs, and other products. Sanai Health Industry Group markets its products throughout China.

Sanai Health Industry Group Company (1889 HK)

Endo International PLC provides specialty healthcare solutions. The Company develops, manufactures, markets and distributes pharmaceutical products and generic drugs. Endo International offers its products to the medical and healthcare industries around the globe.

Hygrovest Limited operates as an investment company. The Company focuses on investments in private and public companies in high growth industries. Hygrovest serves clients worldwide.

Wellfully Limited, doing business as OBJ Limited, operates as a science-based wellness company. The Company offers products for various target wellness sectors, such as personal care, healthcare and anti-aging, personalised medicine, nutrition, and weight loss. OBJ serves customers worldwide.

Phong Phu Pharmaceutical JSC is a pharmaceutical company. The Company manufactures medical drugs, tea products, dairy products and trades cosmetics and provides healthcare services.

Taisho Pharmaceutical Holdings Company Ltd. produces and sells pharmaceuticals, foods, and  other related products. The Company also provides insurance agency and information processing services and operates hotel businesses.

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Taisho Pharmaceutical Holdin (4581 JP)

Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump

While justifiable, a bump is unlikely due to the lack of a substantial activist shareholder, irrevocables, no competing bid and the offer’s 55.5%...

Arun George

Japan Activism: Japan Catalyst Fund Calls Out Taisho Pharma Committee on MBO Price

Japan Catalyst Fund (an engagement activist) operated by Monex is small, but Taisho Pharm was their 5th largest position at end-Oct. They appear to...

Travis Lundy

(Mostly) Asia M&A, Nov 2023: Taisho Pharma, CIMC Vehicle, CMIC, Japan Best Rescue, Shidax

For the month of November, 16 new deals were discussed on Smartkarma with an overall deal size of ~US$13bn. The average premium for the new deals...

David Blennerhassett

Taisho Pharmaceutical (4581 JP): MBO Tender Offer at JPY8,620

The minimum acceptance condition requires a 44% minority acceptance rate. The offer is attractive vs. historical and peer multiples.

Arun George

Taisho Pharma (4581 JP) - Japan's Newest Biggest MBO; The Price Is Light!

Taisho Pharma sets the new Japan record for Largest MBO at ¥700bn. At that price, it is still too cheap. Done for estate planning, with high...

Travis Lundy

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