In today’s briefing:
- Benefit One (2412): M3 Extends For a Full Month
- JIC Consortium Possibly In Line to Win Shinko At “¥800bn”, Which Makes You Go 🤔…
- Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920
- Denso (6902 JP): The Current Playbook
- Money Forward (3394) | A Growth Stock for 2024
- Unification of Quarterly Reports Will Further Increase the Role of TSE
- 2Q Follow-Up – Will Group (6089 JP)
Benefit One (2412): M3 Extends For a Full Month
- Today after the close, Benefit One Inc (2412 JP) amended its Tender Offer Target Opinion Statement to note that Dai Ichi Life had made a proposal to acquire 100%.
- To allow the Board time to evaluate this proposal, the Company requested a Tender extension. Bidder M3 Inc (2413 JP) was obliged to extend 10 days. They extended 20 days.
- This tells us a bunch of things. It is worth thinking about what happened to get here.
JIC Consortium Possibly In Line to Win Shinko At “¥800bn”, Which Makes You Go 🤔…
- A Nikkei article today suggested that Fujitsu had granted preferential negotiating rights to buy Shinko Electric Industries (6967 JP) to a JIC-led consortium (including DNP and Mitsui Chem) for ~¥800bn.
- This happened late in the afternoon session. Shares spiked 5+%, then were halted. A gray market ensued.
- A Bloomberg article provided more info, and the same info nuanced slightly differently. The wording in yet other articles was interesting enough that it is worth discussing.
Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920
- After months of speculation, Shinko Electric Industries (6967 JP) has recommended the JIC alliance’s preconditional tender offer of JPY5,920 per share, an 18.9% premium to the undisturbed price (31 May).
- The pre-condition relates to regulatory approvals in Japan, China, Korea, and possibly Vietnam. The offeror may waive the pre-condition. The offer is long-dated and expected to start in August 2024.
- The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low 7.1% premium to the last close, the offer resulted from a competing bidding process.
Denso (6902 JP): The Current Playbook
- Since the US$4.0 billion secondary placement announcement, Denso Corp (6902 JP)’s shares are down 4.3% from the undisturbed price of JPY2,298 per share (28 November).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Denso’s shares have followed the pattern of previous large placements.
- The offering will likely be priced on 13 December. Investors participating in previous large Japanese placements tend to secure positive returns.
Money Forward (3394) | A Growth Stock for 2024
- Money Forward’s stock price has declined by 2% YTD versus a 23% gain for the overall market. Technically, the stock is approaching oversold levels
- We see 38% upside for Money Forward’s stock price. At 5.5x EV/revenue, the stock is trading at a 50% discount to global peer, Intuit
- We believe that investors are under pricing the size of the Japanese market for cloud accounting and operating leverage from penetration into mid-cap corporate market
Unification of Quarterly Reports Will Further Increase the Role of TSE
- The contents of quarterly reports are the same as those of financial summaries. Therefore, it’s in order that the quarterly reports for 1Q /3Q be unified with the financial summaries.
- The major difference between quarterly securities reports and financial summaries is the significance of legal responsibility. By requiring partial review by auditors, TSE will ensure the reliability of financial summaries.
- Meanwhile, TSE must continue to enhance the ethics of company managers and require companies to eliminate malicious misreporting. Unification of quarterly reports would further increase the role of the TSE.
2Q Follow-Up – Will Group (6089 JP)
- WILL GROUP unveiled its new MTP “WILL-being 2026” this May.
- The aim of the previous MTP “WORK SHIFT Strategy” was to boost profit margins by increasing the weight of high-margin permanent placement and temporary staffing in highly specialized fields, and the Company focused on developing strategic investment domains such as nursing care domain support, support for construction management engineers, and HR support for start-up companies.
- In the previous MTP, although the profit margin improved, Domestic Working Business stagnated.
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