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

Thoughts on Amazon –What Does Its Valuation Tells Us?

Netflix & Amazon Expand in Korea – Not a Coincidence

Okja: The Fight Between Netflix Vs. CJ CGV

Event-Driven

This morning carried an <a href="http://asia.nikkei.com/Business/Deals/Trading-house-Mitsubishi-mulls-bid-for-Lawson" target="_blank">article</a> in the Nikkei suggesting <a href="https://www.smartkarma.com/entities/20668" target="_blank" data-smartkarma-citation="entities:20668:1">Mitsubishi Corp (8058 JP)</a> was 'considering' a tender offer to lift its stake in <a href="https://www.smartkarma.com/entities/1040" target="_blank" data-smartkarma-citation="entities:1040:1">Lawson Inc (2651 JP)</a> from 33.4% to 51%, saying an official decision could be made this week (i.e. today or tomorrow). The general gist is that Mitsubishi wants to help Lawson mount a comeback against 7-Eleven Japan and <a href="https://www.smartkarma.com/entities/320" target="_blank" data-smartkarma-citation="entities:320:1">Familymart Co Ltd (8028 JP)</a> as 7-Eleven was strongly in the lead and now Familymart's joining with UNY has lifted store count to put Lawson in third place. It seems the basic idea is that Mitsubishi would go to 51% in order to drive faster and more far-reaching decision-making to onboard services at Lawson - enhancing the finance business and payment services, offering electricity solutions, increased sharing of logistics networks with other Mitsubishi investees, and partnering with pharmacies/drugstores/etc. The article suggests that the cost of increasing MitCorp's stake (which would be the equivalent of 17.6 million shares) in Lawson could be "more than 140 billion yen." The implied price of spending 140bn yen to up its stake would be just under ¥8,000/share. That seems low.The share price at month end has been above ¥8,000/share all but two of the last 18 months. A single digit percent premium to an 18-month low in order to gain consolidated control of an equity affiliate seems like an inadequate premium. The idea that Lawson might issue shares to MitCorp to the extent that a tender offer price was not acceptable to minorities could be viewed as decidedly bad governance. It is not for a company to offer majority ownership to its existing 'parent' if the company's minority shareholders decide the price is inadequate.More below the fold for subscribers.[Updates/articles will be posted in the Discussion section below so be sure to stop back]

This morning carried an article in the Nikkei suggesting Mitsubishi Corp (8058 JP) was 'considering' a tender offer to lift its stake in Lawson Inc (2651 JP) from 33.4% to 51%, saying an official decision could be made this week (i.e. today or tomorrow). The general gist is that Mitsubishi wants to help Lawson mount a comeback against 7-Eleven Japan and Familymart Co Ltd (8028 JP) as 7-Eleven was strongly in the lead and now Familymart's joining with UNY has lifted store count to put Lawson in third place. It seems the basic idea is that Mitsubishi would go to 51% in order to drive faster and more far-reaching decision-making to onboard services at Lawson - enhancing the finance business and payment services, offering electricity solutions, increased sharing of logistics networks with other Mitsubishi investees, and partnering with pharmacies/drugstores/etc. The article suggests that the cost of increasing MitCorp's stake (which would be the equivalent of 17.6 million shares) in Lawson could be "more than 140 billion yen." The implied price of spending 140bn yen to up its stake would be just under ¥8,000/share. That seems low.The share price at month end has been above ¥8,000/share all but two of the last 18 months. A single digit percent premium to an 18-month low in order to gain consolidated control of an equity affiliate seems like an inadequate premium. The idea that Lawson might issue shares to MitCorp to the extent that a tender offer price was not acceptable to minorities could be viewed as decidedly bad governance. It is not for a company to offer majority ownership to its existing 'parent' if the company's minority shareholders decide the price is inadequate.More below the fold for subscribers.[Updates/articles will be posted in the Discussion section below so be sure to stop back]

Lawson Inc

Lawson - MitCorp Tender Coming?