In today’s briefing:
- Aoki Super (9977) MBO at ¥3,800/Share (All-Time High, 15x Forecast FCF)
- Aoki Super (9977 JP): MBO Tender Offer at JPY3,800
- Japan Airlines: Upside to Expectations Despite A350 Loss
- LaKeel (4074) – Remaining Steadfast in Building Its Ecosystem
Aoki Super (9977) MBO at ¥3,800/Share (All-Time High, 15x Forecast FCF)
- The family which owns and controls ubiquitous Nagoya supermarket chain Aoki Super (9977 JP) will acquire the 47% it does not own in an MBO.
- This appears to be an estate planning exercise, creating a context to hand off ownership from the 77yr old former CEO to his 44yr old son and current CEO.
- This comes in at a 44% premium, an all-time high price, and 15+x forecast FCF (even if the forecast looks a little light). This gets done easily.
Aoki Super (9977 JP): MBO Tender Offer at JPY3,800
- Aoki Super (9977 JP) has recommended an MBO tender offer of JPY3,800 per share, a 43.9% premium to the undisturbed (5 January).
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 13.35% ownership ratio.
- Based on the irrevocables, the minimum acceptance condition requires a 28.6% minority acceptance rate. This acceptance rate is achievable as the offer represents an all-time high.
Japan Airlines: Upside to Expectations Despite A350 Loss
- Our updated analysis suggests that JAL’s FY24 to March 2024 EBIT guidance of ¥ 130bn remains conservative. We see ¥ 177bn as achievable unless forward bookings weaken.
- Our analysis of JAL’s management of inflation highlights it is outperforming many APAC and global peers, keeping unit cost increases to a minimum.
- Reduced overheads have proved the key driver of inflation avoidance, while stable unit personnel costs contrast starkly with US carriers in particular; JAL’s largest international market.
LaKeel (4074) – Remaining Steadfast in Building Its Ecosystem
- On track to scale – over the last 12 months we believe LaKeel has made progress in developing its ecosystem, driving new customer acquisitions, and increasing MMR for its key DX-related in-house LaKeel Products.
- While Q1-3 FY12/2023 results highlighted risks over license sale slippages, LaKeel’s strategy remains focused on providing innovative business and technology solutions with high ROI, and reducing IT ownership costs with reusable microservices and sustainable software development.
- Despite the slower-than-expected business development, we believe LaKeel’s products and services are differentiated to make headway in a market with a significant need for digital transformation, and its ecosystem will expand and become more commercialized.
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