Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

The Amended FamilyMart Document Is A MUST READ For Investor-Stewards

FamilyMart Tender Offer - Winnie and HunnyPot Redux

Quiddity Advisors

Event-Driven

Friday after the close, trading company <a href="https://www.smartkarma.com/entities/maruka-machinery-co-ltd" target="_blank" data-smartkarma-citation="entities:17021:1" rel="noopener">Maruka Machinery (7594 JP)</a> and steel frame and pipe company <a href="https://www.smartkarma.com/entities/furusato-industries-ltd" target="_blank" data-smartkarma-citation="entities:13996:1" rel="noopener">Furusato Industries (8087 JP)</a> which also became a machine and tool wholesaler, made an announcement that they had decided to form a holdco (a HoldCo will be created which will absorb the shares of each company in return for shares in the holdco) called MARUKA FURUSATO Corporation. 
This kind of thing is not a bad thing. Lots of smallcaps in Japan should probably merge to gain scale for their internal functions and activities. And with the change in TSE Market Structure officially launching in April 2022, it would not be surprising for there to be a flurry of such mergers so that companies below the market cap or profitability thresholds can meet those thresholds and stay in the TSE Prime section. While many won't care, some would object to nearly 20% of their float being sold down over 2.5-3.0yrs as those companies are shifted out of their legacy TSE1 membership into a TSE Standard market where it is not clear there will be any major passive index tracking. 
They are in slightly different businesses but if they have decided they belong together, they must have decided there was a good reason for it. Apparently, they started discussions in September 2019 and Furusato proposed integration with Maruka in June 2020, after which they commenced "full-fledged discussions." The goal Maruka decided after long deliberation is to maximize corporate value by forming an engineering trading company - joining on an equal footing. They see ¥2bn of annual synergies at the operating level by 2025. 
Here's where it gets tricky. 
Maruka's decision to "maximize corporate value" for its shareholders means accepting what is optically a 'take-under.' 
And their largest shareholder (17.7%) is an investor some would call an activist fund. 
But there's an even trickier part.

Friday after the close, trading company Maruka Machinery (7594 JP) and steel frame and pipe company Furusato Industries (8087 JP) which also became a machine and tool wholesaler, made an announcement that they had decided to form a holdco (a HoldCo will be created which will absorb the shares of each company in return for shares in the holdco) called MARUKA FURUSATO Corporation. 
This kind of thing is not a bad thing. Lots of smallcaps in Japan should probably merge to gain scale for their internal functions and activities. And with the change in TSE Market Structure officially launching in April 2022, it would not be surprising for there to be a flurry of such mergers so that companies below the market cap or profitability thresholds can meet those thresholds and stay in the TSE Prime section. While many won't care, some would object to nearly 20% of their float being sold down over 2.5-3.0yrs as those companies are shifted out of their legacy TSE1 membership into a TSE Standard market where it is not clear there will be any major passive index tracking. 
They are in slightly different businesses but if they have decided they belong together, they must have decided there was a good reason for it. Apparently, they started discussions in September 2019 and Furusato proposed integration with Maruka in June 2020, after which they commenced "full-fledged discussions." The goal Maruka decided after long deliberation is to maximize corporate value by forming an engineering trading company - joining on an equal footing. They see ¥2bn of annual synergies at the operating level by 2025. 
Here's where it gets tricky. 
Maruka's decision to "maximize corporate value" for its shareholders means accepting what is optically a 'take-under.' 
And their largest shareholder (17.7%) is an investor some would call an activist fund. 
But there's an even trickier part. 

A Complex SmallCap Merger in Japan: Maruka (7594) And Furusato (8087)