In today’s briefing:
- Emart’s Tender Offer for Shinsegae Construction: Arb Trading Angles
- Best Outright and Pair Trades for an Ishiba-Led LDP
- Merger Arb Mondays (30 Sep) – Canvest, Henlius, CPMC, Xingda, Fuji Soft, Capitol, Dyna-Mac
- Tokyo Metro (9023 JP) IPO: TPX Inclusion in November; Global Indices: One in October, One in Feb
- Tender Offer and Taking Private of Shinsegae E&C by E Mart
- Tokyo Metro IPO – Peer Comparison – Pre-COVID to 1Q25
- Takamiya (2445 JP) – 1Q Follow-Up
Emart’s Tender Offer for Shinsegae Construction: Arb Trading Angles
- E Mart Inc is launching a tender offer for 27.33% of Shinsegae Eng & Construction, offering ₩18,300 per share, a 14% premium, from September 30 to October 29.
- This tender’s got zero cancellation or proration risk since they’re all in to buy every share tendered. That makes it a prime event for close spread tracking and trading opportunities.
- Emart needs 95% of Shinsegae Construction’s shares to delist, requiring 22% of the remaining 27%. If they can’t get it, a stock swap with Emart shares is likely.
Best Outright and Pair Trades for an Ishiba-Led LDP
- Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm.
- The Market will be quick to rotate out of names which spiked into Friday’s close on expectation for a Sanae Takaichi win in the LDP election.
- Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market.
Merger Arb Mondays (30 Sep) – Canvest, Henlius, CPMC, Xingda, Fuji Soft, Capitol, Dyna-Mac
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Canvest Environmental Protection Group (1381 HK), Greatview Aseptic Packaging (468 HK), Shanghai Henlius Biotech (2696 HK), Shinko Electric Industries (6967 JP), China Traditional Chinese Medicine (570 HK).
- Lowest spreads: Dyna Mac Holdings (DMHL SP), Seven & I Holdings (3382 JP), Trancom Co Ltd (9058 JP), Fuji Soft Inc (9749 JP), Descente Ltd (8114 JP).
Tokyo Metro (9023 JP) IPO: TPX Inclusion in November; Global Indices: One in October, One in Feb
- Tokyo Metro (9023 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 23 October.
- At the reported indicative IPO price of JPY 1100/share, Tokyo Metro (9023 JP) will be valued at JPY 639.1bn (US$4.49bn).
- The stock should be added to one global index on 29 October, to the TOPIX INDEX on 28 November, while another global index inclusion will need to wait till February.
Tender Offer and Taking Private of Shinsegae E&C by E Mart
- E Mart Inc (139480 KS) is conducting a tender offer of 27.33% of Shinsegae Eng & Construction (034300 KS) (2,126,611 shares) and trying to take the company private afterwards.
- The tender offer price is 18,300 won, which is 14% higher than the closing price on Friday (27 September).
- Tender offer is likely to result in higher price of Shinsegae E&C in the near term but it could be difficult for E Mart to take it private this year.
Tokyo Metro IPO – Peer Comparison – Pre-COVID to 1Q25
- Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.3bn in its Japan IPO.
- Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
- We have looked at the company’s past performance in our previous note. In this note, we will undertake a peer comparison.
Takamiya (2445 JP) – 1Q Follow-Up
- Takamiya (hereafter, the Company) reported its 1Q FY2025/3 sales of ¥9,745 mn (-1.5% YoY), operating profit of ¥262 mn (-35.8% YoY), ordinary profit of ¥344 mn (-44.1% YoY), and profit attributable to owners of parent (hereafter, net profit) of ¥195 mn (-53.2% YoY).
- By segment, the Platform Business and Overseas Business saw increases in both sales and profit, while the Rental Business saw sales increase but profit decline, and the Sales Business saw declines in both sales and profit.
1H 2025/3 and the full-year forecast remains unchanged from the initial forecast.
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