In today’s briefing:
- Fujisoft Tender Offer for Listed Sub Cybernet (4312) – This Is Too Cheap
- Benesse Holdings (9783 JP): EQT Backed Pre-Conditional MBO Tender Offer at JPY2,600
- Vinx Corp (3784) TOB by Parent Fujisoft (9749) – A Bit Cheap, Impossible To Block
- Last Week in Event SPACE: Korea’s Short Selling, Hollysys, Sankyo, Descente
- Shidax Corporation (4837 JP): MBO Tender Offer at JPY800
- Taisei Corp (1801) Partial Tender for PS Mitsubishi Construction (1871)
- ECM Weekly (12th Nov 2023)-Renesas, Bajaj, Alchip, Hybe, Will, Wuxi, ChaPanda, Chenqi, Cello, Honasa
- Preparation in Advance for In-Depth Discussions Is Important for Both Investors and Managers
- Benesse (9783) MBO – ¥2600/Share Is Up 40+% But It Is Still the Wrong Price
Fujisoft Tender Offer for Listed Sub Cybernet (4312) – This Is Too Cheap
- Fuji Soft Inc (9749 JP), as target of activist-ish investor 3D Investment Partners, launched a “Special Committee to Increase Corporate Value” in August 2022. They reported in Nov22 and Feb23.
- They also reported in Aug23, mentioning the four listed subs and synergies. Last week, Fujisoft announced it was buying them all out.
- Cybernet Systems Co (4312 JP) is one of the two larger ones. It is being done too cheaply. Waaay too cheaply. It would not be impossible to block.
Benesse Holdings (9783 JP): EQT Backed Pre-Conditional MBO Tender Offer at JPY2,600
- Benesse Holdings (9783 JP) has recommended an EQT-backed pre-conditional MBO offer of JPY2,600 per share, a 45.1% and 36.3% premium to the undisturbed price and last close, respectively.
- The pre-conditions primarily relate to Japanese and Chinese approvals, which can be waived. Chinese SAMR approval should be forthcoming as education is not a geopolitical fraught sector.
- The offer is long-dated and opens in early February 2024. While not a knockout bid, the offer is fair in the context of Benesse’s muted outlook.
Vinx Corp (3784) TOB by Parent Fujisoft (9749) – A Bit Cheap, Impossible To Block
- Fuji Soft Inc (9749 JP), as target of activist-ish investor 3D Investment Partners, launched a “Special Committee to Increase Corporate Value” in August 2022. They reported in Nov22 and Feb23.
- They also reported in Aug23, mentioning the four listed subs and synergies. Last week, Fujisoft announced it was buying them all out.
- Vinx Corp (3784 JP) is one of the two larger ones. It is being done too cheaply, but it would be nigh impossible to block. A safe deal.
Last Week in Event SPACE: Korea’s Short Selling, Hollysys, Sankyo, Descente
- The Korean Financial Services Commission and the Financial Supervisory Service held a press briefing, unveiling the comprehensive prohibition of short selling from the 6th November, until June 30th next year.
- Recco or Ascendant for Hollysys (HOLI US)? Ascendant could easily get >50% of shares out, and spill the board. Recco, with no shares held, looks to have a weaker hand.
- Sankyo (6417 JP) is cheap. It will never trade at 20x expected PER because of the nature of the business; right now, on an ex-cash basis, it trades 1.6x ex-cash PER.
Shidax Corporation (4837 JP): MBO Tender Offer at JPY800
- Shidax Corp (4837 JP) has recommended an MBO tender offer of JPY800 per share, a 10.3% premium to the undisturbed price (9 November).
- After the settlement of the tender offer, Oisix ra daichi (3182 JP) will acquire a 66.0% stake in the offeror by way of third-party allotment at the tender offer price.
- Despite the skinny premium, the offer is just shy of the ten-year share price high. The minimum acceptance condition requires a 12.5% minority acceptance rate.
Taisei Corp (1801) Partial Tender for PS Mitsubishi Construction (1871)
- Last week, as Ps Mitsubishi Construction (1871 JP) reported earnings, Taisei Corp (1801 JP) announced a Partial Offer for PS Mitsubishi, buying out Ube Cement & Taiheiyo Cement stakes.
- Partial offers have recently traded well before the close, and badly after the result. As we near year-end, this one could trade a bit softer, suggesting a lower back end.
- Shareholder Structure, Pro-ration analysis, and back end calculation grids below.
ECM Weekly (12th Nov 2023)-Renesas, Bajaj, Alchip, Hybe, Will, Wuxi, ChaPanda, Chenqi, Cello, Honasa
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- In the IPO space, WuXi XDC provided some rare rays of hope in Hong Kong, while Honasa Consumer, Cuscal (1229Z AU) and EcoPro Materials did the opposite.
- This week was more about placement with two US$1bn+ deals, a cleanup in Renesas Electronics (6723 JP) and a QIP for Bajaj Finance Ltd (BAF IN).
Preparation in Advance for In-Depth Discussions Is Important for Both Investors and Managers
- TSE plans to publish a list of companies that disclosed and those that are “under consideration” for disclosure in “Management Conscious of Cost of Capital and Stock Price.”
- TSE’s plan to introduce actual investor feedback on how investors view dialogue and engagement and what kind of information disclosure and IR they expect from companies is commendable.
- It is very important to know what investors actually want to know, what management is doing to achieve this, and how they should interact with investors in IR activities.
Benesse (9783) MBO – ¥2600/Share Is Up 40+% But It Is Still the Wrong Price
- Just before the close Friday, the Nikkei reported Benesse Holdings (9783 JP) would be the subject of an MBO in order to restructure the flagging private shinken-zemi business. And grow.
- It turns out it is EQT and the Fukutake family at ¥2600/share – a 2-year high. Wow. It is also a ridiculously cheap price given the assets and money flows.
- I expect this may get some people upset as the valuation methodology is dodgy and the artful (hehehe) Balance Sheet has some easter eggs, and spotted pumpkins… or something.
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