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

Quiddity Advisors

Event-Driven

Those who have been steady observers of the capital structure of <a href="https://www.smartkarma.com/entities/623" target="_blank" data-smartkarma-citation="entities:623:1">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> have oft-wondered why <a href="https://www.smartkarma.com/entities/4221" target="_blank" data-smartkarma-citation="entities:4221:1">NTT Urban Development (8933 JP)</a> was left as a virtual 'orphan', left to conduct its business without quite as much input as one might have hoped, and since the GFC, a thorn in the side of owners who thought it should be done better, differently, by a different owner, with bigger ambitions. Today, NTT - which owns 67.3% of the real estate developer/leaser - <a href="http://www.ntt.co.jp/news2018/1810e/pdf/181015a.pdf" target="_blank">announced</a> (<a href="http://www.ntt.co.jp/news2018/1810/pdf/181015a.pdf" target="_blank">J</a>) that it wanted to buy in the 27.7% of NTT Urban that it did not own through a Tender Offer to start October 16th and run 30 business days through November 27th.The price offered is ¥1680/share, which is a 29.8% premium to today's close (28.6% vs Friday), a 31.6% premium to the 1-month average, and 39.2% and 39.8% to the 3-month and 6-month averages to Friday. It is also a 5-year high price and other than a single day May 13th 2013 (just before the first 'Abenomics bubble' burst a week later) - where the shares closed at ¥1688 - the Tender Offer Price is at 10-year high.The deal is subject to a 'two-step' process whereby after a tender offer, NTT will seek to squeeze out minorities. If NTT gets to 90%, there will be a share cash-out demand by NTT to NTT Urban, who will then oblige remaining minorities to sell their shares. If at the end of the tender, NTT owns more than two-thirds of the shares outstanding but less than 90%, NTT will call for Urban to hold an EGM to vote on a consolidation (reverse share split) of shares where odd lots get cashed out. The result of that would be that all minorities would also be cashed out, but it will take longer. The trick here is that NTT already owns more than two-thirds so this is a fait accompli. There is no minimum share tender required to make it successful, and strictly speaking, NTT needs no shares to squeeze out minorities from here.It's all over but the shouting. Even before it starts. <table class="table table-striped"><tbody>
<tr><td colspan="2"><h2> Schedule of Tender Offer </h2></td></tr>
<tr>
<td> Event </td>
<td>Date</td>
</tr>
<tr>
<td> Announcement Date </td>
<td>15-Oct-18</td>
</tr>
<tr>
<td> Start Date </td>
<td>16-Oct-18</td>
</tr>
<tr>
<td> Closing Date </td>
<td>27-Nov-18</td>
</tr>
<tr>
<td> Payment Date </td>
<td>4-Dec-18</td>
</tr>
<tr>
<td>Likely Squeeze Out if &gt;90%</td>
<td>early January 2019</td>
</tr>
</tbody></table>More below.

Those who have been steady observers of the capital structure of NTT (Nippon Telegraph &amp; Telephone) (9432 JP) have oft-wondered why NTT Urban Development (8933 JP) was left as a virtual 'orphan', left to conduct its business without quite as much input as one might have hoped, and since the GFC, a thorn in the side of owners who thought it should be done better, differently, by a different owner, with bigger ambitions. Today, NTT - which owns 67.3% of the real estate developer/leaser - announced (J) that it wanted to buy in the 27.7% of NTT Urban that it did not own through a Tender Offer to start October 16th and run 30 business days through November 27th.The price offered is ¥1680/share, which is a 29.8% premium to today's close (28.6% vs Friday), a 31.6% premium to the 1-month average, and 39.2% and 39.8% to the 3-month and 6-month averages to Friday. It is also a 5-year high price and other than a single day May 13th 2013 (just before the first 'Abenomics bubble' burst a week later) - where the shares closed at ¥1688 - the Tender Offer Price is at 10-year high.The deal is subject to a 'two-step' process whereby after a tender offer, NTT will seek to squeeze out minorities. If NTT gets to 90%, there will be a share cash-out demand by NTT to NTT Urban, who will then oblige remaining minorities to sell their shares. If at the end of the tender, NTT owns more than two-thirds of the shares outstanding but less than 90%, NTT will call for Urban to hold an EGM to vote on a consolidation (reverse share split) of shares where odd lots get cashed out. The result of that would be that all minorities would also be cashed out, but it will take longer. The trick here is that NTT already owns more than two-thirds so this is a fait accompli. There is no minimum share tender required to make it successful, and strictly speaking, NTT needs no shares to squeeze out minorities from here.It's all over but the shouting. Even before it starts. 
 Schedule of Tender Offer 

 Event 
Date


 Announcement Date 
15-Oct-18


 Start Date 
16-Oct-18


 Closing Date 
27-Nov-18


 Payment Date 
4-Dec-18


Likely Squeeze Out if &gt;90%
early January 2019

More below.

NTT (Nippon Telegraph & Telephone) (9432 JP)

NTT (9432 JP) Buyout of NTT Urban (8933 JP). FINALLY.

Ntt Urban Development

NTT (9432 JP) Buyout of NTT Urban (8933 JP). FINALLY.