Daily Brief Japan: Toyo Construction, Taisho Pharmaceutical Holdin, LIFULL and more

In today’s briefing:

Toyo Construction (1890) – Everyone Hits Pause
Japan Bumpitrage Potential: T&K Toka, IJTT, Taisho, Shidax, Benesse, Tokyo Rakutenchi
Full Report – Lifull (2120 JP)

Toyo Construction (1890) – Everyone Hits Pause

In September, YFO (Yamauchi Family Office) upped its Tender Offer proposal to ¥1,255/share. YFO presented. The Toyo Special Committee met, interviewed, examined, deliberated, then last week rejected YFO’s proposal.
The rejection was a three-parter. First, they rejected YFO for not bringing management/ownership experience. Second, they said the proposal didn’t add enough value. Third, the price was too low.
There were no metrics against which to measure anything. And now Toyo has apparently decided to withdraw its Tender Offer Proposal.

Japan’s merger arb is facing an unusual situation: six merger arb situations (>US$100 million market cap) where the shares have consistently traded through terms.
We evaluate the bumpitrage potential of these six Japanese merger arb situations on qualitative and quantitative metrics.
Based on our analysis, the ranking as measured by the highest bumpitrage potential in descending order are T&K Toka, IJTT, Taisho, Shidax, Benesse and Tokyo Rakutenchi.

LIFULL runs the LIFULL Home’s real estate website. Compared to its main rival, whose strategy is focused mainly on the quantity of listings, LIFULL’s aim is to achieve greater quality, as measured by the percentage of inquiries that lead to sales for professional real estate clients.
While others primarily charge a fixed fee for listings, LIFULL charges a combination of fixed fees and incentive fees based on the number of inquiries received for a listing.
Compared to its main rival LIFULL tends to invest more heavily in software development and considerably less on advertising.

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