In today’s briefing:
- Kokusai Electric Pre-IPO – The Positives – Well Established with High Market Share
- Kokusai Electric (6525 JP) IPO – Index Demand On The Follow
- YFO Reloads Toyo Construction Takeover Proposal at ¥1255/Share
- Activists May Be Pushing Tsuruha Towards a Merger with Welcia
- Kokusai Electric Pre-IPO – The Negatives – Can’t Avoid the Cycles
- KOSAIDO Holdings (7868) – Wide Economic Moat Providing a Major Competitive Advantage
Kokusai Electric Pre-IPO – The Positives – Well Established with High Market Share
- KKR is looking to raise around US$750m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO.
- KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
- In this note, we talk about the positive aspects of the deal.
Kokusai Electric (6525 JP) IPO – Index Demand On The Follow
- Niche Japanese Semiconductor Production Equipment specialist Kokusai Electric (6525 JP) last Thursday announced the TSE approved its late October IPO (with indicative pricing, shares to be sold, and initial prospectus).
- This insight looks at initial shareholder structure, selling group, post-IPO shareholder structure with index inclusion timing, and follow-on flow possibilities.
- At ¥435bn indicative market cap, it will be the largest IPO in Japan since pre-covid, despite coming in a cycle trough. I expect it will be hot.
YFO Reloads Toyo Construction Takeover Proposal at ¥1255/Share
- Last night Reuters teased a headline saying the Nintendo Family Office called YFO (and related entities) would raise its proposed takeover price for Toyo Construction to ¥1255/share.
- Recently, the company had agreed to start an investigation and YFO had dropped its demands for an EGM. In Q1, the company reporetd Revenues +18.6%yoy, reasonably in-line with original guidance.
- This new price comes at a 1% premium to previous close, and is meant to start discussions. The Board has indicated it will start deliberations tomorrow.
Activists May Be Pushing Tsuruha Towards a Merger with Welcia
- Tsuruha is the latest retailer to come under attack from an activist investment fund.
- As with Seven & I, the company fended off demands to shake up its board, crucially with the support of Aeon, its largest stakeholder.
- The move will likely lead to some careful reconsideration of how Tsuruha and Aeon could work together and may even lead to a Welcia/Tsuruha merger.
Kokusai Electric Pre-IPO – The Negatives – Can’t Avoid the Cycles
- KKR is looking to raise around US$750m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO.
- KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
- In this note, we talk about the not-so-positive aspects of the deal.
KOSAIDO Holdings (7868) – Wide Economic Moat Providing a Major Competitive Advantage
- Robust barriers to entry and generating attractive returns – KOSAIDO Holdings is the market-leading funeral services operator in the Tokyo metropolitan area, with a 70% market share in cremations.
- The company’s robust economic moat is derived from its dominant market position as the primary operator of crematorium services in central Tokyo.
- The low likelihood of new entrants due to stringent legal and political barriers further solidifies its competitive advantage.
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