In today’s briefing:
- Toyo Construction (1890) Investors/Traders Beware
- Takashimaya and H2O Cancel Tie-Up
- XXXLutz Consortium/Home24: Additional Acceptance Period
Toyo Construction (1890) Investors/Traders Beware
- On 13 December, Toyo Construction (1890 JP) suitor YFO issued a press release which was not to the liking of Toyo Construction. A day later, Toyo Construction offered its own.
- YFO responded on the 21st, saying ToyoKen’s PR was inaccurate. Not quite a week after that, ToyoKen announced one tiny subsidiary(Tecos) would absorb another (portable toilet rental co Orient Ecology).
- Synergies? None. Growth? None. Scale? Nope. Was this for some other reason investors need to worry about? Maybe.
Takashimaya and H2O Cancel Tie-Up
- Takashimaya and H2O Retailing entered what felt like a forced engagement of convenience in 2008 when all their other competitors were busy merging.
- Although discussions for a full merger were held, in truth, thea agreement was more about practical collaboration to create more efficiencies.
- With both firms now more secure and cross-shareholdings more problematic, they will sell off their equity in each other but continue to work on joint projects.
XXXLutz Consortium/Home24: Additional Acceptance Period
- XXXLutz consortium secures 80.94% of home24 shares. The Additional Acceptance Period runs until 28 December. More shares will be tendered and delisting will eventually take place in 2023, in my view.
- My updated fair value estimate is €7.44/share (average of DCF and comparables, as per the tables below), just 0.8% below the offer price, hence my TP remains unchanged at €7.50.
- Gross spread is 0.93%. The risk of being stranded with a delisted stock encourages tendering at €7.50.
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