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

Surprising NTT Docomo Tender Result Accelerates Squeezeout, Great Re-Allocation, Nikkei 225 Change

NTT Docomo SHOCKER - Nikkei Says Parent NTT To Buy Out Docomo Minorities

NTT Deal for DoCoMo - Not Going Gentle, Definitely Raging Against the Dying of the Light

Gravity Works As WeWork Doesn't; Now Plan B

Quiddity Advisors

Event-Driven

Mega buyouts for cash are rare. Mega buyouts for cash in Japan are even rarer. On 29 september, some 16 hours after the Nikkei published articles suggesting <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> would buy out minorities in <a href="https://www.smartkarma.com/entities/ntt-docomo-inc" target="_blank" data-smartkarma-citation="entities:1089:1" rel="noopener">NTT Docomo Inc (9437 JP)</a>, the deal was announced. It is, as deals, go, a very big deal. It is, as deals go, generous in price, with a very low threshold for success, and an extraordinarily good quality buyer. It doesn't get much easier than this. Since the announcement, the stock has traded $6.5bn in volume, with the last six days basically trading ¥3875-3877 with the last four days seeing most volume on the bid side at ¥3876.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/164/851/original/Screenshot%202020-10-13%20at%207.27.49%20AM.png?1602545297" class="editor-image img-responsive" data-smartkarma-image-id="164851"></figure></section>This sounds like small potatoes but if one pays 5bp commission, buying today at ¥3876 nets you 5.16% annualised. Lever that up a bit and you get a decent return, and in you can get some size on.This is about the easiest pure balance sheet arb trade one is going to find if you are an arbitrageur, but there are much more interesting trades afoot. I expect that out of the US$40bn of stock in the float, some $12-15bn is going to change hands then tender those shares, another $5-10bn will tender their shares, and then another $15+bn of shares will not tender and will instead be squeezed out. This number is surprisingly large and it means some very interesting flows will occur. Much more below the fold. <hr>Previous insights in the series are:<ul>
<li><a href="https://www.smartkarma.com/insights/ntt-docomo-shocker-nikkei-says-parent-ntt-to-buy-out-docomo-minorities" target="_blank" data-smartkarma-citation="insights:43676" rel="noopener">NTT Docomo SHOCKER - Nikkei Says Parent NTT To Buy Out Docomo Minorities</a></li>
<li>
<a href="https://www.smartkarma.com/insights/ntt-deal-for-docomo-not-going-gentle-definitely-raging-against-the-dying-of-the-light" target="_blank" data-smartkarma-citation="insights:43686" rel="noopener">NTT Deal for DoCoMo - Not Going Gentle, Definitely Raging Against the Dying of the Light</a> </li>
</ul>

Mega buyouts for cash are rare. Mega buyouts for cash in Japan are even rarer. On 29 september, some 16 hours after the Nikkei published articles suggesting NTT (Nippon Telegraph &amp; Telephone) (9432 JP) would buy out minorities in NTT Docomo Inc (9437 JP), the deal was announced. It is, as deals, go, a very big deal. It is, as deals go, generous in price, with a very low threshold for success, and an extraordinarily good quality buyer. It doesn't get much easier than this. Since the announcement, the stock has traded $6.5bn in volume, with the last six days basically trading ¥3875-3877 with the last four days seeing most volume on the bid side at ¥3876.This sounds like small potatoes but if one pays 5bp commission, buying today at ¥3876 nets you 5.16% annualised. Lever that up a bit and you get a decent return, and in you can get some size on.This is about the easiest pure balance sheet arb trade one is going to find if you are an arbitrageur, but there are much more interesting trades afoot. I expect that out of the US$40bn of stock in the float, some $12-15bn is going to change hands then tender those shares, another $5-10bn will tender their shares, and then another $15+bn of shares will not tender and will instead be squeezed out. This number is surprisingly large and it means some very interesting flows will occur. Much more below the fold. Previous insights in the series are:
NTT Docomo SHOCKER - Nikkei Says Parent NTT To Buy Out Docomo Minorities

NTT Deal for DoCoMo - Not Going Gentle, Definitely Raging Against the Dying of the Light 


NTT (Nippon Telegraph & Telephone) (9432 JP)

NTT Docomo: The Three Arbs and the Great Re-Allocation Trade