In today’s briefing:
- Roland DG (6789) – Tender Offer by Taiyo Partners – Nice Premium But Too Cheap
- Screen Holdings (7735 JP): Positioning & Potential Passive Buying
- Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys
- Welbe (6556 JP) – MBO by Polaris
- ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel
- Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?
Roland DG (6789) – Tender Offer by Taiyo Partners – Nice Premium But Too Cheap
- Taiyo Pacific Partners took the original parent company (Roland Corp (7944 JP) of Roland DG Corp (6789 JP) private in 2014. It was re-listed in 2020.
- Roland DG is one of the world’s leading large format digital printer manufacturers. They also make some interesting medical devices and systemic tools, and 3D milling/printing/engraving/photo impact machines.
- This TOB is at a 30.1% premium. Almost a 10yr high. But it is not expensive. And even if TPP has 20%, there is a LOT of float left over.
Screen Holdings (7735 JP): Positioning & Potential Passive Buying
- SCREEN Holdings (7735 JP) could be added to a global index at the end of the month and there will be a lot of buying in the stock.
- There is a fair bit of positioning for the potential passive buying and there will be supply in the stock.
- However, the stock trades cheaper than its peers and a correction could provide an opportunity for long-term investors to enter the stock.
Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Ola Electric (1700674D IN) and FirstCry (0172540D IN) IPOs.
- Event-Driven developments: Benefit One Inc (2412 JP), Lawson Inc (2651 JP), Welbe Inc (6556 JP), China Traditional Chinese Medicine (570 HK), L’Occitane (973 HK), Hollysys Automation Technologies (HOLI US).
Welbe (6556 JP) – MBO by Polaris
- On Thursday after the close, an entity tied to Polaris Capital announced an MBO of Welbe Inc (6556 JP). (Note this is Welbe not Welby Inc (4438 JP)).
- The MBO by Tender Offer is set at ¥1,089/share is at a 29.952% premium to Thursday’s last trade. Coincidentally. It is well below where it traded 3-5 years ago.
- If large domestic financial investors want a bump, we might see some fun, but I expect there is enough ownership willing to tender to get this over the hump.
ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, Thai Credit Bank finally ended Thailand’s long dry spell, although it wasn’t a happy ending.
- For placements, REITs appear to be coming back to life with rates now having peaked.
Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?
- EPS and BPS had run in parallel since June 2022, but BPS has accelerated at a more rapid pace since May 2023, and TOPIX has risen sharply since April 2023.
- Since TOPIX is more correlated with BPS than EPS, the hypothesis that “stock prices are more reliant on BPS increases, including cash increases, than on EPS” would be considered.
- Investors may believe that Japanese management still needs more time to use cash effectively, and evaluate companies based on their BPS, which indicates a movement toward improved cash flow.
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