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

Event-Driven

After the close today, Freudenberg SE (the world leader in the non-woven and related materials industry with 7bn euros in global sales in 2014 (1.65bn in nonwovens by themselves)) announced it would launch a tender offer for the shares it does not own in its long-time Japan partner, Japan Vilene (3514 JP) a.k.a. JVC. &nbsp;Freudenberg and Japan Vilene Corp originally formed their&nbsp;partnership in the 1980s&nbsp;and Freudenberg currently owns 33.4% of JVC. The tender is being launched in conjunction with Japan fiber/textile materials giant Toray Industries (3402 JP), which currently owns ~17.5% of Japan Vilene after a 3rd party allotment to Freudenberg and Toray last August &nbsp;(576 yen/share) got them over 50%.&nbsp;The acquirer is FT Holdings KK - a company established last month&nbsp;and&nbsp;currently 100% held by Freudenberg SE. Toray is expected to hold 25% of FT Holdings (the F and T presumably stand&nbsp;for 'Freudenberg' and 'Toray')&nbsp;upon completion.&nbsp;&nbsp;The deal is relatively straightforward. The TOB&nbsp;Price is 1200 yen a share, which is a 35% premium to the close (the classic 'Nikkei premium'), and the price is double where the stock spent the first 4 months of this year, and is 20% higher than the all-time high.Together, Freudenberg and Toray currently own 50.89% of Japan Vilene. The success of the tender offer is contingent on FT Holdings being able to acquire a simple 'majority of the minority' or 12,963,174 shares plus 3.36mm shares owned by Toray for a total&nbsp;of 16,324,174 shares. There is no cap. Any and all shares tendered will be accepted if the minimum condition is met.&nbsp;It should not be that difficult to get this deal across the line.&nbsp;CONCLUSIONS:<ul><li>I expect the deal to trade reasonably tight to terms as soon as it is free to trade (it will go limit up a couple of days before that).&nbsp;</li><li>While the minimum is waivable, I would not expect FT Holdings to waive it such that their total holding would be less than 66.7% after the tender.&nbsp;</li></ul>More below the fold.

After the close today, Freudenberg SE (the world leader in the non-woven and related materials industry with 7bn euros in global sales in 2014 (1.65bn in nonwovens by themselves)) announced it would launch a tender offer for the shares it does not own in its long-time Japan partner, Japan Vilene (3514 JP) a.k.a. JVC. &nbsp;Freudenberg and Japan Vilene Corp originally formed their&nbsp;partnership in the 1980s&nbsp;and Freudenberg currently owns 33.4% of JVC. The tender is being launched in conjunction with Japan fiber/textile materials giant Toray Industries (3402 JP), which currently owns ~17.5% of Japan Vilene after a 3rd party allotment to Freudenberg and Toray last August &nbsp;(576 yen/share) got them over 50%.&nbsp;The acquirer is FT Holdings KK - a company established last month&nbsp;and&nbsp;currently 100% held by Freudenberg SE. Toray is expected to hold 25% of FT Holdings (the F and T presumably stand&nbsp;for 'Freudenberg' and 'Toray')&nbsp;upon completion.&nbsp;&nbsp;The deal is relatively straightforward. The TOB&nbsp;Price is 1200 yen a share, which is a 35% premium to the close (the classic 'Nikkei premium'), and the price is double where the stock spent the first 4 months of this year, and is 20% higher than the all-time high.Together, Freudenberg and Toray currently own 50.89% of Japan Vilene. The success of the tender offer is contingent on FT Holdings being able to acquire a simple 'majority of the minority' or 12,963,174 shares plus 3.36mm shares owned by Toray for a total&nbsp;of 16,324,174 shares. There is no cap. Any and all shares tendered will be accepted if the minimum condition is met.&nbsp;It should not be that difficult to get this deal across the line.&nbsp;CONCLUSIONS:I expect the deal to trade reasonably tight to terms as soon as it is free to trade (it will go limit up a couple of days before that).&nbsp;While the minimum is waivable, I would not expect FT Holdings to waive it such that their total holding would be less than 66.7% after the tender.&nbsp;More below the fold.

QUICKNOTE | Japan Vilene TOB - Good Premium, Friendly, Pretty Straightforward