In today’s briefing:
- Amari Ni Mo… NTT (9432)
- Kyoden (6881 JP) MBO – An Small, Easy, Illiquid, Light But Not Horribly Unfair Done Deal at ¥600
- Softbank (9984 JP): WeWork on the Brink and Other Factors
- Kyoden Company (6881 JP): Founder’s JPY600 Tender Offer
- Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)
- Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players
- Universal Entertainment: Pivoting Our Bullish Focus to Basic Verticals from Okada Casino Only
Amari Ni Mo… NTT (9432)
- NTT reports a Q1 which looks like KDDI where the business looks like KDDI and a bit better than that where it doesn’t. Good. Not great.
- But NTT announced a ¥200bn buyback. Again good. Not great.
- And on Sunday, LDP politician Amari spoke on a Sunday news show about the possible govt selldown of NTT shares. 20yrs is a long time. So no overhang.
Kyoden (6881 JP) MBO – An Small, Easy, Illiquid, Light But Not Horribly Unfair Done Deal at ¥600
- Today, the personal holding company of Kyoden Co Ltd (6881 JP) founder Hashimoto-san announced a Tender Offer to take the company private.
- Together with his company, he owns 64.75%. He only needs 1.93% to tender. The combination of Shokochukin, SMBC, and Yokohama Bank get him over the line.
- This is small, illiquid, and will trade tight, but it’s a done deal.
Softbank (9984 JP): WeWork on the Brink and Other Factors
- Softbank and the Vision Fund’s exposure to WeWork – estimated at USD1.8bn – look increasingly to be at risk of being written off
- Masa’s debts to SoftBank stand at USD5.1bn at 1QFY23 end and we believe that private company valuations are vulnerable, especially in the light of the recent Union Square Ventures write-downs
- Softbank shares trade at a 36% discount to the stated NAV; with Alibaba gone, the potential Arm IPO valuation is critical but SVF1 and 2 private company valuations remain questionable
Kyoden Company (6881 JP): Founder’s JPY600 Tender Offer
- Kyoden Co Ltd (6881 JP) has recommended the founder’s tender offer of JPY600 per share, a 32.5% premium to the undisturbed price (9 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 1.91% ownership ratio.
- The minimum acceptance condition (lower limit) requires an undemanding 5.4% minority acceptance rate. The tender offer is reasonable.
Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)
- A year ago I wrote that same headline as Inpex Corp (1605 JP) reported H1 results, a change in forecasts, and a bigly buyback.
- Yesterday, Inpex reported FY2023 H1 results, a change in forecasts, and a bigly buyback.
- The mechanics are the same. The impact is a bit different, but it is worth looking at. Then there is the event on 28 February 2024.
Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players
- FUJIFILM Holdings (4901 JP) reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.
- Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.
- Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.
Universal Entertainment: Pivoting Our Bullish Focus to Basic Verticals from Okada Casino Only
- We have been covering UE for five years principally because we were bullish about its intentions to bring its Manila casino business public.
- Our focus has shifted. We see the casino IPO as inevitable but we like the stock now because it has performed well in its core Pachinko and media businesses post-covid.
- If the Okada casino deal gest past current legal issues it would be a catalyst “bonus” to holders who come into the stock now, on a slight dip.
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