Daily Brief Health Care: Taisho Pharmaceutical Holdin, IHH Healthcare, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Taisho Pharmaceutical (4581 JP): Japan Catalyst Pushes for a Bump
IHH Healthcare (IHH MK): Double-Digit Growth Across Key Metrics for Q3; Bed Expansion to Continue
MBOs Would Open the Door to Investment for Companies that Weren’t Invested for Fear Of “Value Trap”

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

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.

IHH Healthcare (IHH MK) reported stellar performance in 3Q23 exceeding expectations, with double-digit revenue and EBITDA growth, while PAT more than doubles on higher patient volumes and improved case mix.
To deliver profitable growth, IHH will continue its organic expansion, including adding close to 4,000 beds in the next five years to its existing 12,000 operational beds.
Notwithstanding the strong underlying demand for quality healthcare services driving operational and financial growth, IHH expects cost pressures from elevated inflation, and rising interest rates.

The fact that many IPO companies either don’t need to raise capital or don’t share the same goal of going public is the crux of the problem.
It would be conducive to improving quality of TSE as a whole if companies that cannot share the objectives of a listed company with shareholders are delisted through an MBO.
An MBO by the founding family would open the door to investment for companies that have been unable to invest for fear of falling into the “value trap.”

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