In today’s briefing:
- Renesas (6723) – YET ANOTHER Clean-Up Block Trade – This Time Mitsubishi Elec
- Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]
- Beyond the Bubble: A Deep Dive into the Forces Behind the Nikkei Index Surge
- Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder
- JAPAN ACTIVISM: Is Murakami-San Going To Do A PacMetals Rug Pull on Aozora? Or Is This For Real?
- Renesas Electronics Block – Smaller than Recent Deals but Still Likely Well Flagged
- Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan
- Quiddity JPX-Nikkei 400 Rebal 2024: End-Feb 2024 Estimates
- Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)
- Tokyo Metro IPO Early Look – Could Raise Around US$2bn While Still Recovering from COVID
Renesas (6723) – YET ANOTHER Clean-Up Block Trade – This Time Mitsubishi Elec
- Today after the close, Mitsubishi Electric (6503 JP) announced the sale of its position in Renesas Electronics (6723 JP). That’s 50,706,800 shares.
- This is the third large block in four months (Renesas in November for 223mm shares, NEC and Hitachi in January 2024 for 123mm shares).
- This is smaller, and reasonably well-flagged. Index demand is longer-dated.
Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]
- The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.
- Today post-close we got the deal. I was a little surprised it came this fast, but it’s now mostly done it appears – largely as predicted in the last piece.
- There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry.
Beyond the Bubble: A Deep Dive into the Forces Behind the Nikkei Index Surge
- Japan’s Nikkei Stock Average has surged past its 1989 peak, fueled by global investor interest, corporate reforms, and innovative investment initiatives like the Nippon Individual Savings Account (NISA).
- This resurgence marks a significant milestone in Japan’s economic landscape, reflecting renewed investor confidence, structural reforms, and potential growth opportunities in the market.
- The Nikkei’s surpassing of its previous peak signals a shift in perception towards Japan’s market potential, prompting investors to reconsider the country’s economic trajectory and explore new avenues for investment.
Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder
- Murakami’s entity, City Index Eleventh, reported a 5.42% shareholding in Aozora Bank Ltd (8304 JP). Murakami started buying a day after the disastrous 3QFY23 results.
- Murakami’s average buy-in price is JPY2,137.88 per share, a 34% discount to the pre-3QFY23 results share price.
- Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term trading play replicating the Pacific Metals (5541 JP) playbook.
JAPAN ACTIVISM: Is Murakami-San Going To Do A PacMetals Rug Pull on Aozora? Or Is This For Real?
- Yesterday after the close, well-known Japanese activist Murakami-san’s preferred entity City Index Eleventh filed a Large Shareholder Report.
- The blast across Bloomberg was “*AOZORA 5.4% STAKE REPORTED BY CITY INDEX ELEVENTH.” Sounds exciting after the shares dropped 34% in two days earlier this month after reporting big writedowns.
- But there has to be a question here. Why? And Why this way? And what kind of activism would be possible?
Renesas Electronics Block – Smaller than Recent Deals but Still Likely Well Flagged
- Mitsubishi Electric (6503 JP) is looking to raise approximately US$800m through an accelerated secondary block deal, via selling 50.71m shares (2.6% of TSO) of Renesas Electronics (6723 JP) stock.
- The deal will be an easy one to digest at only three days of three month ADV.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan
- Aeon Co Ltd (8267 JP), Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) have announced an alliance to establish the largest drugstore alliance in Japan by December 2027.
- Aeon will carry out several Tsuruha transactions – buy Oasis 13.58% stake at JPY15,500 per share and, on receiving regulatory approval, reach 27.17% of the voting rights.
- The agreements involve merging Tsuruha and Welcia through a share exchange offer and Aeon subsequently increasing its Tsuruha voting rights from 27.17% to less than 51%.
Quiddity JPX-Nikkei 400 Rebal 2024: End-Feb 2024 Estimates
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
- Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-February 2024.
Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)
- Aeon will almost definitely increase its stake in Tsuruha Holdings, which on its own will catalyse drugstore competitors to consider their mergeable options.
- Tsuruha MAY merge with Welcia under Aeon and just talk of this will catalyse drugstore competitors even more.
- But the ongoing fusion of drugstore retailing and FMCG formats like supermarkets and convenience stores, will also spur the entire FMCG sector to respond to Aeon’s massive potential dominance.
Tokyo Metro IPO Early Look – Could Raise Around US$2bn While Still Recovering from COVID
- Tokyo Metro (TKYMETRO JP)’s shareholders, the Japanese and Tokyo Metropolitan Governments, could look to raise up to US$2bn by selling half of their stake via an IPO.
- Tokyo Metro is one of the two metro network operators in the Tokyo region. It operates nine subway lines.
- In this note, we take an early look at the possible listing.
💡 Before it’s here, it’s on Smartkarma
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