In today’s briefing:
- Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting
- Rakuten’s New “Bond-Type Share” Issuance – Quite Quirky to Quantulate Rakuten’s Quisquous New Quoz
- Outsourcing (2427) MBO Arrives! Bain Launches Cheeky, Opportunistic, Low(Priced) TOB
- Outsourcing (2427 JP): Relief as Bain Launches Tender at Unchanged Terms
- Aeon: Logistics Issues Drive Efficiency
- Olympus Corp (7733 JP): Q3 Operating Profit Misses Estimates Despite Sales Beat; FY24 Guidance Cut
Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting
- On 14 February, Sony Corp (6758 JP) and Bandai Namco Holdings (7832 JP) announced an equity offering of nearly 4.5mm shares of Toei Animation (4816 JP).
- Float on Toei Animation (4816 JP) has been low. This would raise it to meet the minimum standard to stay listed on the TSE Standard market section.
- To get to TSE Prime, it needs another offering. And there are lots of cross-holders to go.
Rakuten’s New “Bond-Type Share” Issuance – Quite Quirky to Quantulate Rakuten’s Quisquous New Quoz
- Today, Rakuten Group (4755 JP) announced it would propose an amendment to its Articles at the AGM (28 March) to issue “Bond-Type Class Shares.” First reaction: You wot, mate?
- The company states it wants to “strengthen its financial base through reducing interesting-bearing debt by equity-related financings and conduct proactive control of debt maturity schedule, etc.”
- Now it wants to issue listed bond-type shares. Dividends not interest. The last Japanese issuer of something similar was NEC in 2001. Few will remember, so we study the situation.
Outsourcing (2427) MBO Arrives! Bain Launches Cheeky, Opportunistic, Low(Priced) TOB
- After an extension due to a European Foreign Subsidies Review filing, and a small ‘accident’ regarding the earnings release, we have a deal.
- The earnings release itself seemed more innocuous than articles and rumour suggested show the causes of impairments and so it seemed like there was little cause to walk/declare MAC.
- Now it will be done in 20 days. I still think this is cheeky, opportunistic, and low, and it is up to the float to decide what to do.
Outsourcing (2427 JP): Relief as Bain Launches Tender at Unchanged Terms
- Outsourcing Inc (2427 JP) announced that the pre-condition was satisfied, and Bain’s tender offer remains unchanged at JPY1,755 per share, a 52.1% premium to the undisturbed (8 December).
- Shareholders will breathe a sigh of relief as the weak 4Q and significant impairments have raised concerns that Bain would cut its offer or walk away.
- The offer attractiveness has increased partly due to lower consensus. At the last close and for a 3 April payment, the gross/annualised spread is 2.0%/22.8%.
Aeon: Logistics Issues Drive Efficiency
- Restrictions on driver overtime due in April are forcing logistics rationalisation across supply chains.
- Aeon is one of the few retailers that runs its own logistics platforms but, even so, changes to logistics practices will feed through to how stores are merchandised
- This could result in competitive pressure on smaller supermarket chains.
Olympus Corp (7733 JP): Q3 Operating Profit Misses Estimates Despite Sales Beat; FY24 Guidance Cut
- Olympus Corp (7733 JP) announced disappointing Q3FY24 result. Although revenue increased 7% YoY to ¥239B, beating estimate of ¥236B, operating profit declined 30% YoY to ¥34B, below estimate of ¥43B.
- The company cut FY24 operating profit guidance for second time and reduced revenue guidance after raising it in November. Noto Peninsula earthquake is the main reason for reducing revenue guidance.
- Although both revenue and profits are expected to improve in FY25, it will be difficult to achieve an operating margin of 20% and sales growth of 5%.
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