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

City Index Eleventh OFFICIALLY Launches Next Japan Asia Group (3751) Hostile Tender Offer

CIE Boosts Its Japan Asia Group (3751) TOB Price - Hidden Implications

Infroneer (5076 JP) Tender Offer for Toyo Construction (1890 JP) Could Get Funky

Overbid: JAG Special Committee Plays Stupid so Murakami Plays Hardball

Japan Asia Group MBO Fails, Now JAG Against Murakami's Higher Bid

Japan Asia Group (3751) : Defense Against Hostile TOB Is Bad News

Quiddity Advisors

Event-Driven

<p>The now four-month long and more-than-sordid affair which is the Japan Asia Group MBO, </p><ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-asia-group-ltd" target="_blank" data-smartkarma-citation="entities:12428:1" rel="noopener">Japan Asia (3751 JP)</a> chairman Yamashita in November announced an "MBO" at ¥600/share (against the ¥300+/share where it had been trading) for the hodgepodge of businesses which is Japan Asia Group, but did so with Carlyle stripping out the two high-dollar prized assets, executing some elaborate corporate restructuring, leaving the CEO - was contributing US$600,000 to the enterprise - owning some residual stakes in those assets, more than $100mm of cash, plus the residual businesses. </li>
<li>The board agreed that was reasonable and recommended the offer. </li>
<li>Activist Yoshiaki Murakami, operating through his unit City Index Eleventh Inc. decided it was not, bought 10% in quick order, then kept on buying and that lifted the price well through terms. He ended up with 20% and suggested instead to the Board he buy the company at ¥840/share. </li>
<li>To avoid that, the bidding party re-arranged their finances and came up with a new price of ¥1200/share. The Board agreed this too was reasonable and recommended the offer.</li>
<li>Murakami-san asked for due diligence so he could put forth a plan to be considered by the Board, and a chance to talk to the employees. JAG refused.</li>
<li>City Index Eleventh launched a Tender Offer at ¥1210. The JAG Board rejected it, saying City Index Eleventh was somehow disrespecting shareholders, and did not have a plan, accusing it of plans to strip out the assets that Yamashita-san was going to strip out, and accusing City Index Eleventh of not caring for employees. </li>
<li>JAG decided on a new business plan which involved stripping out the same two assets, paying a special dividend to shareholders of ¥300/share, and then pursuing restructuring. </li>
<li>Murakami-san dropped his Tender Offer to avoid paying ¥300/share more.</li>
</ul><p>That was two weeks ago. </p><h3>The NEW News</h3><ul>
<li>Japan Asia Group on 9 March <a href="https://www.japanasiagroup.jp/wordpress/wp-content/uploads/2021-3-9_2.pdf" target="_blank" rel="noopener">announced</a> it would propose a poison pill measure to the June AGM.</li>
<li>Unbeknownst to everyone at the time, CIE had been buying more - 2.29% from 4 March through 9 March. That was announced on the 12th and 15th.</li>
<li>Yesterday the stock went ex-dividend, awaiting an EGM for shareholders to approve. </li>
<li>On the 17th of March, City Index Eleventh <a href="https://www.japanasiagroup.jp/wordpress/wp-content/uploads/2021-3-18_2.pdf" target="_blank" rel="noopener">announced</a> they would re-launch another Tender Offer at ¥910/share this time - the old Tender Offer Price of ¥1,210 less the ¥300/share special dividend which just went ex-.</li>
<li>On the 18th, JAG announced CIE's plans, and got upset that CIE had not responded to the JAG "question" posed in the threat to introduce a poison pill. </li>
</ul><p>More below the fold. </p>

The now four-month long and more-than-sordid affair which is the Japan Asia Group MBO, 

Japan Asia (3751 JP) chairman Yamashita in November announced an "MBO" at ¥600/share (against the ¥300+/share where it had been trading) for the hodgepodge of businesses which is Japan Asia Group, but did so with Carlyle stripping out the two high-dollar prized assets, executing some elaborate corporate restructuring, leaving the CEO - was contributing US$600,000 to the enterprise - owning some residual stakes in those assets, more than $100mm of cash, plus the residual businesses. 
The board agreed that was reasonable and recommended the offer. 
Activist Yoshiaki Murakami, operating through his unit City Index Eleventh Inc. decided it was not, bought 10% in quick order, then kept on buying and that lifted the price well through terms. He ended up with 20% and suggested instead to the Board he buy the company at ¥840/share. 
To avoid that, the bidding party re-arranged their finances and came up with a new price of ¥1200/share. The Board agreed this too was reasonable and recommended the offer.
Murakami-san asked for due diligence so he could put forth a plan to be considered by the Board, and a chance to talk to the employees. JAG refused.
City Index Eleventh launched a Tender Offer at ¥1210. The JAG Board rejected it, saying City Index Eleventh was somehow disrespecting shareholders, and did not have a plan, accusing it of plans to strip out the assets that Yamashita-san was going to strip out, and accusing City Index Eleventh of not caring for employees. 
JAG decided on a new business plan which involved stripping out the same two assets, paying a special dividend to shareholders of ¥300/share, and then pursuing restructuring. 
Murakami-san dropped his Tender Offer to avoid paying ¥300/share more.
That was two weeks ago. The NEW News
Japan Asia Group on 9 March announced it would propose a poison pill measure to the June AGM.
Unbeknownst to everyone at the time, CIE had been buying more - 2.29% from 4 March through 9 March. That was announced on the 12th and 15th.
Yesterday the stock went ex-dividend, awaiting an EGM for shareholders to approve. 
On the 17th of March, City Index Eleventh announced they would re-launch another Tender Offer at ¥910/share this time - the old Tender Offer Price of ¥1,210 less the ¥300/share special dividend which just went ex-.
On the 18th, JAG announced CIE's plans, and got upset that CIE had not responded to the JAG "question" posed in the threat to introduce a poison pill. 
More below the fold. 

Murakami-San Launches New JAG (3751) Tender Offer