In today’s briefing:
- Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose
- Weekly Deals Digest (13 Aug) – Toshiba, Kyoden, Eoflow, Chindata, Estia, InvoCare, OreCorp, Origin
- Daiken Corporation (7905 JP): Itochu’s JPY3,000 Tender Offer
- EQD | Nikkei 225 (NKY) WEEKLY Resistance Targets
- Sapporo Clinical Laboratory Inc (TYO 9776)
Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose
- Itochu owns 36.3% of building materials and engineering firm Daiken Corp (7905 JP). They have launched a tender with gimmicky Majority-of-Minority to buy the rest at ¥3,000/share, 4.7x FY2024e EBITDA.
- That’s low-ish, but given securities holdings, inventory, and net receivables at 4+x EBITDA it’s probably too cheap, but it gets quite close to the minimum threshold just with cross-holders.
- This deal price doesn’t include synergies (according to the valuations and the SC) but a bump would need an agitator. Hope alone won’t get it.
Weekly Deals Digest (13 Aug) – Toshiba, Kyoden, Eoflow, Chindata, Estia, InvoCare, OreCorp, Origin
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Rakuten Securities (RAKUSEC JP), EbixCash (EBIXC IN), Lalatech Holdings Co Ltd (LALA HK) and Lianlian DigiTech (2104619D CH) IPOs.
- Event-Driven developments – Eoflow (294090 KS), Kyoden Co Ltd (6881 JP), Toshiba Corp (6502 JP), Metro Pacific Investments Co (MPI PM), Estia Health (EHE AU), Origin Energy (ORG AU).
Daiken Corporation (7905 JP): Itochu’s JPY3,000 Tender Offer
- Daiken Corp (7905 JP) has recommended Itochu Corp (8001 JP)’s tender offer of JPY3,000 per share, a 28.8% premium to the undisturbed price (10 August).
- 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 31.83% ownership ratio.
- The minimum acceptance condition (lower limit) requires a 50.0% minority acceptance rate (majority of minority condition). The tender offer is light vs historical multiples but represents a 5-year high price.
EQD | Nikkei 225 (NKY) WEEKLY Resistance Targets
- The Nikkei 225 index closed up last week and it has a good probability to rise further this week: the MRM tool has identified the current pattern as “bullish”.
- Resistance targets are located past 33500, the index could reach that target this week.
- If the index rises for 3 weeks or more, it could breakout from the previous resistance range around 33700, and reach targets past 34000.
Sapporo Clinical Laboratory Inc (TYO 9776)
- This is a quick profile of one of the many Japanese stocks that have caught my interest and are in my cheap Japanese basket.
- I’ll be doing more frequent short write ups on names in this basket over the coming months.
- Sapporo Clinical Laboratory is a $24m market cap operator of retail pharmacies and clinical testing facilities across Hokkaido, Japan.
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