In today’s briefing:
- Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose
- Where & How to Check CFD Trading Data Starting Sept 1st
- Daiken Corporation (7905 JP): Itochu’s JPY3,000 Tender Offer
Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose
- Itochu owns 36.3% of building materials and engineering firm Daiken Corp (7905 JP). They have launched a tender with gimmicky Majority-of-Minority to buy the rest at ¥3,000/share, 4.7x FY2024e EBITDA.
- That’s low-ish, but given securities holdings, inventory, and net receivables at 4+x EBITDA it’s probably too cheap, but it gets quite close to the minimum threshold just with cross-holders.
- This deal price doesn’t include synergies (according to the valuations and the SC) but a bump would need an agitator. Hope alone won’t get it.
Where & How to Check CFD Trading Data Starting Sept 1st
- The CFD balance information (both overall and individual stock) will be provided by KOFIA and KOSCOM, starting from September 1st.
- September 1st also marks the day when local brokerages that temporarily suspended CFD trading services will resume them.
- With the disclosure of individual stock CFD balances starting from September 1st, there’s a high probability of another volatility turning point.
Daiken Corporation (7905 JP): Itochu’s JPY3,000 Tender Offer
- Daiken Corp (7905 JP) has recommended Itochu Corp (8001 JP)’s tender offer of JPY3,000 per share, a 28.8% premium to the undisturbed price (10 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 31.83% ownership ratio.
- The minimum acceptance condition (lower limit) requires a 50.0% minority acceptance rate (majority of minority condition). The tender offer is light vs historical multiples but represents a 5-year high price.
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