In today’s briefing:
- Terumo (4543 JP) Secondary Offering – Smaller Than It Looks
- Terumo Placement – US$1.4bn Secondary Selldown, Buyback Should Aid Deal Dynamics
- Terumo (4543 JP): A US$1.4 Billion Secondary Offering
- Timee IPO: Trading Update
- After the TSE “Engagement,” It Is the Company Itself to Devise and Execute a Management Strategy
Terumo (4543 JP) Secondary Offering – Smaller Than It Looks
- On Thursday 29 August, Terumo Corp (4543 JP) announced a secondary offering where 7 major cross-holders would sell just under 5% of the shares outstanding to international investors.
- In recent quarters, Terumo has seen better consensus EPS growth than Peers in recent quarters, and Peers have underperformed. Right now, Terumo isn’t ‘cheap’ but consensus growth is strong.
- This back-end demand in this case has enough moving parts that it bears a closer look.
Terumo Placement – US$1.4bn Secondary Selldown, Buyback Should Aid Deal Dynamics
- A group of shareholders are looking to raise around US$1.36bn from selling ~5% stake in Terumo Corp (4543 JP).
- While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Terumo (4543 JP): A US$1.4 Billion Secondary Offering
- Terumo Corp (4543 JP) has announced a secondary offering of up to 73.2 million shares, worth JPY203 billion (US$1.4 billion) at the last close.
- The secondary offering facilitates the exit of large shareholders. Terumo also announced a buyback worth a maximum of JPY30 billion or 15 million shares.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 September (likely 10 September).
Timee IPO: Trading Update
- Timee began trading on 26th July and share price has surged 47% since its debut where the company priced the IPO at top of the indicative price range.
- Though Timee Inc (215A JP) is in early stages, the company has proven that its business model is successful and continue to dominate a market that is underpenetrated.
- Though we think there is further upside, if you have already bought shares at the IPO, we would suggest taking profits and wait for a dip to make a re-entry.
After the TSE “Engagement,” It Is the Company Itself to Devise and Execute a Management Strategy
- Since there was no difference in IR Disclosures between companies that increased valuations over past year and those that didn’t, it’s clear that improvement IR Disclosures alone won’t raise valuations.
- Since many companies with large market capitalizations have high foreign ownership, overseas investor engagement has had a positive impact on their high return on capital.
- TSE’s support for companies with small market capitalizations is a type of engagement that encourages companies whose engagement doesn’t reach them to think about their management strategies.
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