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

After the close today, <a href="https://www.smartkarma.com/entities/mitsubishi-chemical-holdings" target="_blank" data-smartkarma-citation="entities:12781:1" rel="noopener">Mitsubishi Chemical (4188 JP)</a> ("MCH") announced a Tender Offer to buy in the minorities of <a href="https://www.smartkarma.com/entities/mitsubishi-tanabe-pharma" target="_blank" data-smartkarma-citation="entities:6311:1" rel="noopener">Mitsubishi Tanabe Pharma (4508 JP)</a> at a 50% premium to last.This is big news. It is a big deal.<ul>
<li>It is coming at a 50% premium and a two-year high.</li>
<li>It is a $4.5bn deal to take out minorities. </li>
</ul>This will make some people happy. It is also probably a pretty easy deal to get done given what the shareholder register looks like. The question will be whether the non-cash cash-like assets are being valued properly, whether the possible Gilenya revenue stream is being valued properly, and whether MCH is simply buying Tanabe's previously high-priced purchases for lower multiples. Given MCH and crossholders own about 61% of shares out, and passive and active foreigners own a fair bit and some will be fine with this deal, it looks pretty easy to complete. That said, it may trade a little wide simply because it is a big deal and arbitrageurs would have to carry over year-end.As always, MUCH more below the fold.<hr>Also as always, I can recommend reading the <a href="https://www.smartkarma.com/insights/quiddity-japan-m-a-guide-2019" target="_blank" rel="noopener">Quiddity Japan M&amp;A Guide</a> for more info and links to relevant documentation.

After the close today, Mitsubishi Chemical (4188 JP) ("MCH") announced a Tender Offer to buy in the minorities of Mitsubishi Tanabe Pharma (4508 JP) at a 50% premium to last.This is big news. It is a big deal.
It is coming at a 50% premium and a two-year high.
It is a $4.5bn deal to take out minorities. 
This will make some people happy. It is also probably a pretty easy deal to get done given what the shareholder register looks like. The question will be whether the non-cash cash-like assets are being valued properly, whether the possible Gilenya revenue stream is being valued properly, and whether MCH is simply buying Tanabe's previously high-priced purchases for lower multiples. Given MCH and crossholders own about 61% of shares out, and passive and active foreigners own a fair bit and some will be fine with this deal, it looks pretty easy to complete. That said, it may trade a little wide simply because it is a big deal and arbitrageurs would have to carry over year-end.As always, MUCH more below the fold.Also as always, I can recommend reading the Quiddity Japan M&amp;A Guide for more info and links to relevant documentation.

MitChem Deal for MitTanabePharma - Opportunistic But Likely Not To Cause Too Much Upset