In today’s briefing:
- The Next Step in Lawson’s Big Boots Adventure – KDDI and MitCorp to Take It Private
- Lawson (2651 JP): KDDI Corp (9433 JP) Pre-Conditional Tender Offer at JPY10,360
- Oriental Land: A Storm Brewing from Activist Coalition
- Shiseido (4911 JP): This Fallen Angel Is Fixable
- Lawson & KDDI: Not Just Because Japanese E-Commerce Is an Omnichannel Model
- Nissan’s Renault Led Selldown Updates – Lack of Ampere Listing Brings Back the US$4bn Overhang
- KLA & LaserTec, AMD, Hyperscaler Capex, SK Hynix, SWKS and QRVO, WOLF, MCHP
The Next Step in Lawson’s Big Boots Adventure – KDDI and MitCorp to Take It Private
- Today, just before the close, the Nikkei sprung a headline saying KDDI Corp (9433 JP) would take over Lawson Inc (2651 JP). The stock immediately headed to limit up.
- Post-Close, details emerged. KDDI will buy the 50% that MitCorp does not own, this will become a 50/50 JV. TOB launch at ¥10,360 will be in April. Squeezeout in September.
- This appears to be the Next Step in Lawson’s Big Boots Adventure. The premium is too light. The price is too low. And that is not counting the synergies.
Lawson (2651 JP): KDDI Corp (9433 JP) Pre-Conditional Tender Offer at JPY10,360
- Lawson Inc (2651 JP) has recommended a pre-conditional tender offer from KDDI Corp (9433 JP) at JPY10,360 per share, an 18.8% premium to the undisturbed (5 February).
- The pre-conditions relate to regulatory approvals in Japan, China, South Korea, and the EU. The offer is expected to start in April, suggesting no significant issues, particularly with SAMR approval.
- Based on the irrevocables, the minimum acceptance condition requires a 30.2% minority acceptance rate, achievable as the offer represents an all-time high.
Oriental Land: A Storm Brewing from Activist Coalition
- Activist investor, Elliott Management has acquired over a 2% stake in Mitsui Fudosan (8801 JP) and is urging it to sell its 6% stake in Oriental Land (4661 JP).
- Elliott appears to have identified the path of least resistance, as Mitsui Fudosan had already indicated a willingness to sell its Oriental Land shares last year.
- If Elliott’s campaign proves successful, it will inadvertently benefit Palliser, which is currently challenging Keisei Electric Railway Co (9009 JP) with a similar proposal.
Shiseido (4911 JP): This Fallen Angel Is Fixable
- Shiseido Company (4911 JP) relies heavily on Japan and China, each making up over one quarter of sales.
- The long thesis is simple – I expect improvement in both regions in the near future, and the valuation is very attractive.
- Blackstone just announced a potential bid for L’Occitane (973 HK), which I have written extensively about. We could potentially see a pickup in interest in the sector.
Lawson & KDDI: Not Just Because Japanese E-Commerce Is an Omnichannel Model
- KDDI’s agreement with Lawson and Mitsubishi to make a tender offer for the convenience store chain is a game-changer for what has become a slow growth convenience store sector.
- There are myriad potential synergies across e-commerce, new store types and also the promising new revenue stream of retail media. Lawson may be worth more than KDDI’s offer suggests.
- And while Lawson may be behind Seven Eleven and Familymart, on some KPIs, like HQ revenues, it is No. 1 and also matches Seven Eleven on same-store sales.
Nissan’s Renault Led Selldown Updates – Lack of Ampere Listing Brings Back the US$4bn Overhang
- One year ago we looked at the arrangement between Nissan (7201 JP) and Renault (RNO FP) regarding their relationship, which left Renault with a 28% Nissan stake to be sold.
- Since then, Renault has undertaken one selldown but its recent announcement of Ampere’s listing cancellation once again raises the possibility of a further selldown of Nissan’s stake by Renault.
- In this note, we talk about the updates since our previous note and the impact of the Ampere listing delay.
KLA & LaserTec, AMD, Hyperscaler Capex, SK Hynix, SWKS and QRVO, WOLF, MCHP
- KLA had a rare miss. The guidance was a bit light for the inspection execution machine.
- KLA rarely misses and is by far the best financially managed of the large-cap semicap companies.
- KLA reports Q2 EPS $6.16 ex-items vs FactSet $5.91
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
