Daily BriefsIndustrials

Daily Brief Industrials: Toshiba Corp, WCP and more

In today’s briefing:

  • Toshiba (6502 JP) Getting Closer to Crunch Time So Ongoing News “Leaks” Likely
  • Toshiba – Japan Industrial Partners The Only Real Bid?
  • WCP IPO: Final IPO Price Set, Still an Avoid

Toshiba (6502 JP) Getting Closer to Crunch Time So Ongoing News “Leaks” Likely

By Travis Lundy

  • Three interviews and comments by Senior Toshiba Boardmembers (chairperson and head of Special Committee) and the CEO prep the ground for a full company deal, or no deal.
  • If no deal, there’s downside to the 5yr average Toshiba/Peers ratio. If you see 50% deal probability, at mid ¥6000s or better, IRRs are OK. But there is jump risk.
  • I don’t see the activists just deciding to bail en masse if no deal. I think they take it further, which means I think the Board wants a deal.

Toshiba – Japan Industrial Partners The Only Real Bid?

By Mio Kato

  • Since the second of Jun Toshiba is down 14.7% while TOPIX is up 0.7%. 
  • This underperformance against TOPIX and industry peers suggests that some of the implied acquisition premium has dissipated. 
  • With reasonable potential for some form of bid coming through we consider the news about Japan Industrial Partners growing its consortium.

WCP IPO: Final IPO Price Set, Still an Avoid

By Arun George

  • WCP (WCP KS), a lithium-ion batteries separator company, has set its IPO price at KRW60,000 per share, a hefty 25-40% discount on the “desired” IPO price range of KRW80,000-100,000. 
  • The target raise has declined from KRW720-900 billion (US$517-646 million) to KRW432 billion (US$310 million) due to the lower IPO price and offer shares.
  • While the final IPO price is now reasonable, the process smacks desperation and calls into question the credibility of the syndicate’s forecasts. This is still an avoid.

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