In today’s briefing:
- Seven & I Holdings (3382 JP): Uncomfortable Truths
- 7&I (3382) – Clarifications of Clarifications But Progress Is Apparent
- Fuji Soft (9749 JP) – KKR Does Deal With the Family To Squeeze Out Minorities – You Can Join Too
- Event Driven- SKF India Demerger: The Automotive & Industrial Split
- How to Clean Up Korea’s Borrowing Balance Stats
- This Needs To Be Sorted: Great Eastern (GE SP)’s Protracted Suspension
- NZME’s Strategic Review and Activist Involvement Signal Potential Value Unlock Through OneRoof Spin-Off and Board Overhaul
Seven & I Holdings (3382 JP): Uncomfortable Truths
- Seven & I Holdings (3382 JP) has published two documents to respond to misinformation and detail its “constructive engagement” with Alimentation Couche-Tard (ATD CN).
- The statements underscore the Board’s serious doubts about securing US antitrust approval. The significant discrepancies in the engagement timeline point to two parties at loggerheads.
- While the Board claims it is pursuing a dual-track process to create value, the reality is that the process is designed to hinder Couche-Tard’s offer to facilitate the restructuring plan.
7&I (3382) – Clarifications of Clarifications But Progress Is Apparent
- On 10 March, Seven & I Holdings (3382 JP) released a statement about its interactions with Alimentation Couche-Tard (ATD CN). The next day, ATD released its own. They didn’t match.
- The 7&i spokesperson admitted one technical point, but investors seemed to believe ATD over 7&i. On 13 March, ATD held a presentation in Tokyo. Materials? Unchanged. Earnings comments? Unchanged.
- This morning, 7&i released a document which “corrects the record regarding critical false and misleading claims about 7&i’s engagement with Alimentation Couche-Tard (ACT).” OUCH. The stock fell.
Fuji Soft (9749 JP) – KKR Does Deal With the Family To Squeeze Out Minorities – You Can Join Too
- KKR’s Second Tender Offer for Fuji Soft Inc (9749 JP) ended 19 February 2025 and KKR got a whopping 57.9% after Bain bowed out. It was close.
- The Nozawa founder said it would not tender. Others family members may have, but now KKR has signed a deal with Nozawa family company YK NFC, to support the squeezeout.
- Assuming, Nozawa Hiroshi’s stake and the NFC stake remain unchanged, that cements the result of the 25 April AGM. But there may be games to play.
Event Driven- SKF India Demerger: The Automotive & Industrial Split
- SKF India Ltd (SKF IN) has announced the demerger of its industrial business, which will be listed separately for enhanced focus and operational efficiency in both segments.
- The company’s automotive business has high volume but low margins, whereas the industrial segment offers higher margins, highlighting a significant contrast in profitability between the two business segments.
- The automotive business would attract investors seeking long-term, steady growth, while the industrial segment would appeal to investors focused on higher margins and more lucrative returns.
How to Clean Up Korea’s Borrowing Balance Stats
- Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.
- They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.
- Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.
This Needs To Be Sorted: Great Eastern (GE SP)’s Protracted Suspension
- Back on the 10th May 2024, OCBC (OCBC SP) launched a voluntary unconditional general Offer for the 11.56% in life/non-life insurer Great Eastern Holdings (GE SP) not held.
- The Offer closed on the 12th July with OCBC holding 93.62%. Shares were subsequently. suspended. And have been suspended ever since. Compulsory acquisition was not afforded.
- The SGX has thrice granted OCBC an extension of time to restore the float. UK-based activist Palliser is agitating for better terms. Time for a bump.
NZME’s Strategic Review and Activist Involvement Signal Potential Value Unlock Through OneRoof Spin-Off and Board Overhaul
- NZME Limited’s strategic review of OneRoof aims for potential separation, with activist Jim Grenon acquiring a 13.5% stake.
- Grenon and Osmium Partners are pushing for board changes and OneRoof’s monetization, suggesting a possible spin-off.
- The sum-of-the-parts valuation estimates NZME’s stock at A$1.49/share, implying a 35% upside from current levels.
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