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

Quiddity Advisors

Event-Driven

Today after the close, <a href="https://www.smartkarma.com/entities/15841" target="_blank" data-smartkarma-citation="entities:15841:1">Koito Manufacturing (7276 JP)</a><a href="https://www.koito.co.jp/english/global-image/news/pdf/201904231640417811301715cbec1791f42b.pdf" target="_blank">announced</a> a Tender Offer to take out the minority shareholders in <a href="https://www.smartkarma.com/entities/4192" target="_blank" data-smartkarma-citation="entities:4192:1">Ki Holdings (6747 JP)</a>. This has been long-awaited and long-needed.
Koito Manufacturing started more than 100 years ago as a supplier of fresnel lenses for railway signals. It became Koito Manufacturing in the midst of a WWII reorganization, by which time it was making lighting for railways, trains, seagoing vessels, and airports. After WWII the company developed reclining seats for trains and airplanes and then entered into the sealed beam headlight market to supply automobile headlights. Just after WWII, a distribution company was formed to distribute the industrial lights and seats. That company was eventually renamed Koito Industries and eventually the business of Koito Manufacturing split into the business of automobile lighting (Koito Manufacturing) and airport, railway, industrial, lights and signals, and commercial real estate lighting (those big red lights on the corners of tall buildings which blink at night so helicopters don't run into them), and rail and airplane seats (Koito Industries). 
Once upon a time the company was incredibly cash and financial asset rich, and was an obvious BIMBO target but in 2009-2010 there was a scandal of airplane seat test falsification where the company had just copied the results of past tests. That required a test of 150,000 seats across 1,000 planes for 32 airlines in 24 countries. Airbus shut them down as a supplier almost immediately and Boeing took them off the approved list for newbuild seats in 2010. It took two years and all the seats were tested and passed but the 2009-2010 scandal effectively put Koito Industries out of the airplane seat business. The company spun out everything but the airplane seats into Koito Electric Industries in 2011 and then renamed itself KI Holdings the same year. 
Finally, in 2019, what is half a transportation lighting/signalling company and half an electronics/LED company is being taken over by the parent. 
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However, the modalities of how this is getting done are symptomatic of a shocking lack of good governance process.
This deal effectively requires zero independent-thinking economically-motivated investors to tender to make it a success and force minority squeezeout and delisting. This deal can almost certainly be accomplished with every single one of them refusing to participate.
Given that it is a major company within the Toyota sphere of influence conducting this, it is all the more disappointing (though somehow not surprising). 
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Today after the close, Koito Manufacturing (7276 JP)announced a Tender Offer to take out the minority shareholders in Ki Holdings (6747 JP). This has been long-awaited and long-needed.
Koito Manufacturing started more than 100 years ago as a supplier of fresnel lenses for railway signals. It became Koito Manufacturing in the midst of a WWII reorganization, by which time it was making lighting for railways, trains, seagoing vessels, and airports. After WWII the company developed reclining seats for trains and airplanes and then entered into the sealed beam headlight market to supply automobile headlights. Just after WWII, a distribution company was formed to distribute the industrial lights and seats. That company was eventually renamed Koito Industries and eventually the business of Koito Manufacturing split into the business of automobile lighting (Koito Manufacturing) and airport, railway, industrial, lights and signals, and commercial real estate lighting (those big red lights on the corners of tall buildings which blink at night so helicopters don't run into them), and rail and airplane seats (Koito Industries). 
Once upon a time the company was incredibly cash and financial asset rich, and was an obvious BIMBO target but in 2009-2010 there was a scandal of airplane seat test falsification where the company had just copied the results of past tests. That required a test of 150,000 seats across 1,000 planes for 32 airlines in 24 countries. Airbus shut them down as a supplier almost immediately and Boeing took them off the approved list for newbuild seats in 2010. It took two years and all the seats were tested and passed but the 2009-2010 scandal effectively put Koito Industries out of the airplane seat business. The company spun out everything but the airplane seats into Koito Electric Industries in 2011 and then renamed itself KI Holdings the same year. 
Finally, in 2019, what is half a transportation lighting/signalling company and half an electronics/LED company is being taken over by the parent. 

However, the modalities of how this is getting done are symptomatic of a shocking lack of good governance process.
This deal effectively requires zero independent-thinking economically-motivated investors to tender to make it a success and force minority squeezeout and delisting. This deal can almost certainly be accomplished with every single one of them refusing to participate.
Given that it is a major company within the Toyota sphere of influence conducting this, it is all the more disappointing (though somehow not surprising). 


Koito Mfg (7276) Finally Announces TOB for KI Holdings (6747) Subsidiary