In today’s briefing:
- SG Holdings to Launch TOB on C&F Logistics (9099) At A Whopping ¥5,740/Share – HUGE Governance Win
- Infocom (4348 JP): Blackstone’s Rumoured JPY260bn Bid to Acquire Teijin’s Stake
- Chilled & Frozen Logistics (9099 JP): SG Holdings’ Stunning JPY5,740 Offer
- Quiddity JPX-Nikkei 400 Rebal 2024: End-May 2024 Estimates
- Oki Electric Industry (6703): Full-Year FY03/24 Update
- Buy the Pullback; Market Dynamics Remain Healthy; Buys in Tech, Discretionary, Healthcare, Utilities
SG Holdings to Launch TOB on C&F Logistics (9099) At A Whopping ¥5,740/Share – HUGE Governance Win
- Chilled & Frozen Logistics Holdings (9099 JP) was near an all-time high in late March when it closed at ¥2,041 the day AZ-Com Maruwa Holdings (9090 JP) bid ¥3,000/share.
- That was hostile, and C&F’s Board reacted swiftly, looking for a market check and competitive process. It got one. It was VERY successful in getting the best bid.
- SG Holdings (9143 JP) has bid ¥5,740 – a very full multiple and 91% higher than AZ-Com’s price. I don’t expect an overbidder. Huge governance win for Japan minorities.
Infocom (4348 JP): Blackstone’s Rumoured JPY260bn Bid to Acquire Teijin’s Stake
- Bloomberg reports that Blackstone (BX US) has agreed to acquire Teijin Ltd (3401 JP)’s 55% stake in Infocom Corp (4348 JP) at a rumoured valuation of JPY260 billion.
- The potential minority offer price depends on whether the rumoured valuation refers to market cap or enterprise value and whether Teijin will share TOB tax benefits.
- The most likely scenario is that the valuation refers to the market cap, with Teijin sharing TOB tax benefits, resulting in a minority offer of around JPY5,720 per share.
Chilled & Frozen Logistics (9099 JP): SG Holdings’ Stunning JPY5,740 Offer
- Chilled & Frozen Logistics Holdings (9099 JP) has recommended SG Holdings (9143 JP)’s JPY5,740 tender offer, a 91.3% premium to AZ-Com Maruwa Holdings (9090 JP)’s JPY3,000 hostile offer.
- SG Holdings’ offer premium is stupendous. However, the offer values C&F at a CY2024 EV/EBITDA of 27.2x vs. Alps Logistics (9055 JP) offer at a CY2024 EV/EBITDA of 29.2x.
- The Board deserves credit. AZ-COM Maruwa is unlikely to engage in a bidding war as SG Holding’s offer has the Board’s recommendation and comes with a hefty takeover premium.
Quiddity JPX-Nikkei 400 Rebal 2024: End-May 2024 Estimates
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
- In this insight, we take a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-May 2024.
Oki Electric Industry (6703): Full-Year FY03/24 Update
- Founded in 1881, Oki Electric Industry Co., Ltd. manufactures electrical and communications equipment, ICT equipment, and systems that utilize these products.
- In FY03/24, OKI reported full-year consolidated sales of JPY421.9bn, operating profit of JPY18.7bn, recurring profit of JPY18.3bn, and net income of JPY25.6bn.
- OKI Electric Industry Co., Ltd. announced that it expects to record income taxes–deferred in its consolidated and non-consolidated financial results for FY03/24.
Buy the Pullback; Market Dynamics Remain Healthy; Buys in Tech, Discretionary, Healthcare, Utilities
- Global MSCI indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) are pulling back following recent breakouts to multi-year highs. Europe, Japan also pulling back to uptrend supports.
- Short-Term supports to watch-discussed in our May 23, 2024 Int’l Compass-include $110.50 on ACWI-US, $53.50 on ACWX-US, $80 on EFA-US, and $41-42 on EEM-US; buy this pullback.
- As long as these supports hold, we anticipate significantly higher prices ahead. Combination of supports holding and healthy market dynamics continues to validate our bullish outlook on global equities.
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