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

Sakai Ovex MBO Reloaded - Up 27% from Last Weak Bump But Still Cheap

Sakai Ovex MBO - Wrong Price (And the Bidder Knows It)

Quiddity Advisors

Event-Driven

On Thursday 25 March after the close, it was <a href="http://www.sakaiovex.co.jp/ir/3138_sakai.pdf" target="_blank" rel="noopener">announced</a> that the MBO/Takeover/Tender Offer for <a href="https://www.smartkarma.com/entities/sakai-ovex-co-ltd" target="_blank" data-smartkarma-citation="entities:20002:1" rel="noopener">Sakai Ovex (3408 JP)</a> which had been bumped in price from ¥2850 to ¥3000 had, in fact failed. The company announced that it was reinstating the March-end dividend that it had previouslyFrom the beginning, the takeover was too cheap. I discussed the original bid in <a href="https://www.smartkarma.com/insights/sakai-ovex-mbo-wrong-price-and-the-bidder-knows-it" target="_blank" data-smartkarma-citation="insights:47961" rel="noopener">Sakai Ovex MBO - Wrong Price (And the Bidder Knows It)</a>. The shares traded through terms almost immediately, then higher. Then it was bumped +5.26%, which I thought was weak (discussed in <a href="https://www.smartkarma.com/insights/savai-ovex-mbo-a-very-weak-bump" target="_blank" data-smartkarma-citation="insights:48933" rel="noopener">Savai Ovex MBO - A Very Weak Bump</a>) but shares traded down to terms and just below as the Tender Offer was ending. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/197/733/original/Screenshot+2021-03-28+at+9.01.40+PM.png?1616937800" class="editor-image img-responsive" data-smartkarma-image-id="197733"></figure></section>The Tender Offer ended up getting ~63+% of the shares out, which was less than the 66.67% necessary to complete successfully. That the tender offer got to that level and was not extended on a technicality is somewhat telling.That 37% of shareholders did NOT tender is quite interesting. Then on Friday, after the stock dipped hard and bounced back decently, we got new news of an activist having bought 6.2% of the shares out. This changes things. More discussion below.

On Thursday 25 March after the close, it was announced that the MBO/Takeover/Tender Offer for Sakai Ovex (3408 JP) which had been bumped in price from ¥2850 to ¥3000 had, in fact failed. The company announced that it was reinstating the March-end dividend that it had previouslyFrom the beginning, the takeover was too cheap. I discussed the original bid in Sakai Ovex MBO - Wrong Price (And the Bidder Knows It). The shares traded through terms almost immediately, then higher. Then it was bumped +5.26%, which I thought was weak (discussed in Savai Ovex MBO - A Very Weak Bump) but shares traded down to terms and just below as the Tender Offer was ending. The Tender Offer ended up getting ~63+% of the shares out, which was less than the 66.67% necessary to complete successfully. That the tender offer got to that level and was not extended on a technicality is somewhat telling.That 37% of shareholders did NOT tender is quite interesting. Then on Friday, after the stock dipped hard and bounced back decently, we got new news of an activist having bought 6.2% of the shares out. This changes things. More discussion below.

Sakai Ovex Tender Offer Fails But The Stock Gains an Activist