IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

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Equity Capital Markets

Bundl Technologies Private Limited provides food ordering and delivery services. The Company operates a fleet of delivery personnel who pick up orders from restaurants and deliver it to customers. Bundl Technologies serves customers in India.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bundl-technologies-private-limited-swiggy" target="_blank" data-smartkarma-citation="entities:35630:1" rel="noopener">Swiggy (1255298D IN)</a>, a hyperlocal commerce platform, aims to raise up to US$1.4 billion through an IPO at a price range of Rs371-390.</li>
<li>In <em><strong><a href="https://www.smartkarma.com/insights/swiggy-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:163915" rel="noopener">Swiggy IPO: The Bull Case</a></strong></em>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on food delivery and Instamart's lagging Zomato on key metrics, ongoing losses, and cash burn.</li>
</ul>



Swiggy (1255298D IN), a hyperlocal commerce platform, aims to raise up to US$1.4 billion through an IPO at a price range of Rs371-390.
In Swiggy IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on food delivery and Instamart's lagging Zomato on key metrics, ongoing losses, and cash burn.


Event-Driven

FUJI SOFT INCORPORATED is an independent software developer, specializing in communications and machine control software, business application software for bank and insurance companies, and operating system software.  Fuji Soft also installs, manages, and maintains computer systems.  The Company develops and sells word processing packaged software and also provides internet service.

<ul>
<li>Bain has <a href="https://www.baincapital.co.jp/sites/default/files/2024-10/BC_PR_29102024.pdf" target="_blank" rel="noopener">updated</a> its <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> tender documents, which mostly outline previously disclosed information. The update could be a prerequisite for Board recommendation. </li>
<li>Bain’s refusal to waive the precondition pushes the Board to recommend both offers. KKR seems uninterested in negotiations or bumping its offer but will have to concede on one.</li>
<li>The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or launches (KKR partners with Bain).</li>
</ul>


Bain has updated its Fuji Soft Inc (9749 JP) tender documents, which mostly outline previously disclosed information. The update could be a prerequisite for Board recommendation. 
Bain’s refusal to waive the precondition pushes the Board to recommend both offers. KKR seems uninterested in negotiations or bumping its offer but will have to concede on one.
The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or launches (KKR partners with Bain).


Fuji Soft (9749 JP): Bain Updates as the End Game Draws Closer

Elematec Corporation imports and exports various electronic parts and optical materials and equipment.  The Company's products include high-speed data cables, thermostats, optical film, micro lens, and heat sink fans.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elematec-corp" target="_blank" data-smartkarma-citation="entities:2866:1" rel="noopener">Elematec Corp (2715 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/toyota-tsusho-corp" target="_blank" data-smartkarma-citation="entities:13826:1" rel="noopener">Toyota Tsusho (8015 JP)</a> at JPY2,400, 41.4% premium to the undisturbed price of JPY1,697 (28 October).</li>
<li>The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high.</li>
<li>While the offer is below the midpoint IFA DCF range and implies a discount to peer multiples, it is attractive vs historical trading ranges. This is a done deal.</li>
</ul>



Elematec Corp (2715 JP) has recommended a tender offer from Toyota Tsusho (8015 JP) at JPY2,400, 41.4% premium to the undisturbed price of JPY1,697 (28 October).
The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high.
While the offer is below the midpoint IFA DCF range and implies a discount to peer multiples, it is attractive vs historical trading ranges. This is a done deal.


Elematec (2715 JP): Toyota Tsusho (8015 JP)’s JPY2,400 Tender Offer

Nec Networks & System Integr / Event-Driven

NEC Networks & System Integration Corporation designs, constructs, and maintains communication systems.  The Company's services include system integration services for digital switching, local area network (LAN), and mobile communication systems.  NEC Networks & System Integration also constructs information infrastructure and intelligent building facilities.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC Corp (6701 JP)</a> at JPY3,250, 21.5% premium to the undisturbed price of JPY2,675 (28 October).</li>
<li>The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high. </li>
<li>While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal. </li>
</ul>



Nec Networks &amp; System Integr (1973 JP) has recommended a tender offer from NEC Corp (6701 JP) at JPY3,250, 21.5% premium to the undisturbed price of JPY2,675 (28 October).
The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high. 
While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal. 


NESIC (1973 JP): NEC (6701 JP)’s JPY3,250 Tender Offer

Beijing Capital Grand Limited operates as a property developer. The Company runs integrated property projects management, commercial property projects management, and other businesses. Beijing Capital Grand serves customers in China.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-capital-grand-ltd" target="_blank" data-smartkarma-citation="entities:18241:1" rel="noopener">Beijing Capital Grand (1329 HK)</a> disclosed a Cayman scheme privatisation offer from <a href="https://www.smartkarma.com/entities/beijing-capital-land-ltd-h" target="_blank" data-smartkarma-citation="entities:4543:1" rel="noopener">Beijing Capital Land Ltd H (2868 HK)</a> at HK$0.85 per share, a 46.6% premium to the undisturbed price. </li>
<li>The key condition will be approval by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection). The offer price is final.</li>
<li>The <a href="https://www.smartkarma.com/entities/sino-ocean-group-holding-limited" target="_blank" rel="noopener">Sino-Ocean Group (3377 HK)</a> receivers, which hold a blocking stake, will support a liquidity event to exit, particularly as the offer is reasonable compared to historical trading ranges.  </li>
</ul>



Beijing Capital Grand (1329 HK) disclosed a Cayman scheme privatisation offer from Beijing Capital Land Ltd H (2868 HK) at HK$0.85 per share, a 46.6% premium to the undisturbed price. 
The key condition will be approval by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection). The offer price is final.
The Sino-Ocean Group (3377 HK) receivers, which hold a blocking stake, will support a liquidity event to exit, particularly as the offer is reasonable compared to historical trading ranges.  


Beijing Capital Grand (1329 HK): Capital Group’s Scheme Privatisation at HK$0.85

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

Arun George
IPOs and Catalysts/Events
• Global Equity Research Ltd

Swiggy IPO: The Bear Case

Swiggy aims to raise up to US$1.4 billion. The bear case rests on food delivery and Instamart's lagging Zomato on key metrics, ongoing losses, and...

Arun George

Fuji Soft (9749 JP): Bain Updates as the End Game Draws Closer

The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or...

Arun George

Elematec (2715 JP): Toyota Tsusho (8015 JP)’s JPY2,400 Tender Offer

While the offer is below the midpoint IFA DCF range and implies a discount to peer multiples, it is attractive vs historical trading ranges (it...

Arun George

NESIC (1973 JP): NEC (6701 JP)’s JPY3,250 Tender Offer

While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal.

Arun George

Beijing Capital Grand (1329 HK): Capital Group’s Scheme Privatisation at HK$0.85

Shareholders with blocking stakes are likely to be supportive, mainly as the offer is reasonable compared to historical trading ranges. At the...

Arun George