In today’s briefing:
- Inabata & Co (8098) – LARGE Equity Secondary Offering by Sumitomo Chemical
- “Requests” Through Overseas Investor Engagement Will Continue to Be More Effective than TSE Requests
Inabata & Co (8098) – LARGE Equity Secondary Offering by Sumitomo Chemical
- On Friday after the close, Inabata & Co (8098 JP) announced Sumitomo Chemical (4005 JP) would sell down a large stake in a ~$200mm secondary equity offering.
- Mizuho Bank’s Retirement Benefit Trust account sells down too. Sumitomo Chem will keep 10+% and other crossholders remain.
- This is “big” at 80 days of ADV with limited early index demand, but a 10% fall would make this cheap enough to buy vs Peers.
“Requests” Through Overseas Investor Engagement Will Continue to Be More Effective than TSE Requests
- In Japan, many companies have large gap between their stock price and their intrinsic value due to issues related to the use of assets and other resources or cash flow.
- Companies want to use the example of “improvement measures” to be released by TSE in January as a template, so we can’t expect “management is serious about tackling this issue.”
- The fact that ROE has improved modestly over the past decade indicates that management hasn’t made fundamental changes to traditional management strategies to address the challenges faced by individual companies.
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