In today’s briefing:
- Renesas Clean-Up Block Trade – Overhang Out of The Way And Time To Own Again
- Shidax (4837) – Nikkei Scoops MBO (Anncmt Post-Close), Family Wants to Buy at ¥800 Which Is Too Low
- Olympus (7733) – OP Hit but Additional Buyback; Positive Dynamics but Flow Risks Persist
- Softbank (9984 JP): WeWork Hangover and Other Challenges
Renesas Clean-Up Block Trade – Overhang Out of The Way And Time To Own Again
- INCJ made a lot of money on Renesas Electronics (6723 JP) over the years and arguably did a great job helping the firm change direction. Now they are out.
- Last night they launched a block sale through JPM and Bof A for 130.2317mm shares. They priced the heavily-oversubscribed deal at a discount of 8% or ¥2143/share.
- That’s a big discount (so bad broking) for such oversubscription on a clearly-flagged deal but now they are out.
Shidax (4837) – Nikkei Scoops MBO (Anncmt Post-Close), Family Wants to Buy at ¥800 Which Is Too Low
- 13mos ago I wrote about Shidax Corp (4837 JP) which an interesting restructuring past and a refreshing governance outlook going forward in Shidax Outlook May Change – Better Governance Matters.
- The stock was up 25% in that period to yesterday. Today, a Nikkei article mid-day suggests the Shida family will launch an MBO. Stock popped. Earnings out after the close.
- The article suggests a take-private MBO with Oisix ra daichi (3182 JP) again supporting the deal. 30 minutes ago Shidax responded saying an offer was put forth at ¥800/share.
Olympus (7733) – OP Hit but Additional Buyback; Positive Dynamics but Flow Risks Persist
- Yesterday, Olympus Corp (7733 JP) announced Q2 earnings which were trifle light, and announced a sharp downward revision to full-year OP despite higher revs on weaker yen.
- OP takes a hit because of expenses related to the shutdown of Veran Medical device sales (announced 6 Sep, “causing” a 2.4% share price fall the next day).
- They also announced an ¥80bn buyback. That should be worth 3.0-3.5% of shares out, but overhang exists. The label is the label. The details are inside. They matter.
Softbank (9984 JP): WeWork Hangover and Other Challenges
- Softbank’s exposure to WeWork continues to haunt it beyond the close of 2QFY23, due to its credit support agreements
- Aside from WeWork, we continue to see risks to valuations supporting the NAV; in particular, Arm Holdings and SVF2 which accounted for 45% of group equity value
- Softbank shares trade at a 45% discount to the stated NAV yet there is downside risk to Arm’s valuation along with questions over private company valuations at SVF1 and SVF2
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