In today’s briefing:
- Arcland Service (3085 JP): Share Exchange Offer from Arclands Corp
- Money Forward (3994) | Costs Under Control
- Okada Casino Momentum Signals an Entry Point Despite Legal Woes with Its Spac Hedge Fund Deal
- Activist Investors Have Been Consistent, but Environment Around Companies Has Changed Significantly
- ECM Weekly (16th Apr 2023) – Rakuten Bank, Harita Nickel, Merdeka Battery, ZJLD, Adicon, Supcon
Arcland Service (3085 JP): Share Exchange Offer from Arclands Corp
- Arcland Service (3085 JP)/Arcland SHD has recommended Arcland Sakamoto (9842 JP)/Arclands’ share exchange offer at 1.87 Arclands shares per Archland SHD share.
- The implied offer value of JPY3,051.84 per share at Arclands’ last close price is a 35.3% premium to the undisturbed price of JPY2,256.00 per share (14 April).
- The offer requires Arcland OGM (25 May) and Arcland SHD EGM (22 June) shareholder approval. Arcland SHD shareholders will be supportive as the deal metrics are attractive.
Money Forward (3994) | Costs Under Control
- Money Forward’s Q1 sales grew 43% YoY to 6.8 billion yen, which beat the top end of guidance (Y6.2-6.6b).
- EBITDA came in at minus 704 million yen, far ahead of guidance for -Y1.2-1.7b. Money Forward drastically curtailed hiring in the quarter.
- Money Forward’s stock has turned in a 26% performance so far this year. We believe the stock can continue to rally on focused cost control.
Okada Casino Momentum Signals an Entry Point Despite Legal Woes with Its Spac Hedge Fund Deal
- 26 Capital, a US hedge fund that has crafted an innovative spac deal to bring the leading Manila casino property into an IPO by this fall has stalled.
- The overall tone of recovery in Philippine gaming in this early post-covid era is speeding up and expected to meet or surpass baseline 1919 growth easily.
- We see an attractive entry point for Okada’s owner, Tokyo traded Universal Entertainment, based both on its strong performance and the ultimate success of the IPO.
Activist Investors Have Been Consistent, but Environment Around Companies Has Changed Significantly
- While the shareholding of banks and insurances has dropped significantly, that of foreign shareholders has risen to 30%, making it impossible to ignore the opinions of overseas investors as before.
- Since the introduction of the Corporate Governance Code, the concept of governance and ROE has permeated companies, making it possible for them to understand the background of activist investors’ proposals.
- Besides the close relationship between changes in valuations and changes in foreign shareholding, overseas investors account for 70% of TSE’s transactions, forcing management to increasingly listen to overseas investor’s voices.
ECM Weekly (16th Apr 2023) – Rakuten Bank, Harita Nickel, Merdeka Battery, ZJLD, Adicon, Supcon
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- Momentum appears to be picking up on the IPO front with a few successful listing helping sentiment
- On the placement front, GDR flow appears to have resumed.
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