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

JALUX (2729 JP) Tender Offer Commences - Open & Shut Case With Weirdness

Quiddity Advisors

Event-Driven

Today after the close, <a href="https://www.smartkarma.com/entities/sojitz-corp" target="_blank" data-smartkarma-citation="entities:14437:1" rel="noopener">Sojitz Corp (2768 JP)</a> and <a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201 JP)</a> together announced they had created an entity to buy out minorities in <a href="https://www.smartkarma.com/entities/jalux-inc" target="_blank" data-smartkarma-citation="entities:4339:1" rel="noopener">Jalux Inc (2729 JP)</a>, which operates in the aircraft and airport ground equipment servicing businesses, and airline servicing businesses such as onboard mail order sales and merchandising, and the F&amp;B business related to servicing airlines. Sojitz already owns 22.22% and JAL owns 21.56%, and Japan Airport Terminal owns 8.08%. Minorities own 48.14%. The goal is to take the company private, buying at least 1.8741mm shares from the minorities to get to two-thirds plus a share.Given that everyone has basically always known this was going to happen, the minimum for success is less than one-third of the minority, the airline industry is doing badly, and the price is a 50% premium to last (and given the impact of covid-19 it does not seem patently offensive), I expect this gets done easily. A 50% premium is pretty juicy.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/249/original/Screenshot+2021-11-02+at+6.11.40+PM.png?1635847923" class="editor-image img-responsive" data-smartkarma-image-id="239249"></figure></section>But a deal is a deal and there are deal details to scrutinise so we do so below.

Today after the close, Sojitz Corp (2768 JP) and Japan Airlines (9201 JP) together announced they had created an entity to buy out minorities in Jalux Inc (2729 JP), which operates in the aircraft and airport ground equipment servicing businesses, and airline servicing businesses such as onboard mail order sales and merchandising, and the F&amp;B business related to servicing airlines. Sojitz already owns 22.22% and JAL owns 21.56%, and Japan Airport Terminal owns 8.08%. Minorities own 48.14%. The goal is to take the company private, buying at least 1.8741mm shares from the minorities to get to two-thirds plus a share.Given that everyone has basically always known this was going to happen, the minimum for success is less than one-third of the minority, the airline industry is doing badly, and the price is a 50% premium to last (and given the impact of covid-19 it does not seem patently offensive), I expect this gets done easily. A 50% premium is pretty juicy.But a deal is a deal and there are deal details to scrutinise so we do so below. 

Sojitz and JAL to Buy Out JALUX Minorities in Tender Offer