Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

MANDOM CORPORATION manufactures and markets a variety of cosmetic products for men and women.  The Company's products include hair care and skin care cosmetics.

<ul>
<li>Today late in the afternoon session, the Nikkei reported that the MBO price would be bumped by "about 30%". The stock popped 4.6%. </li>
<li>Post-Close, the deal is bumped from ¥1,960 to ¥2,520 (+29%). Activist holders Murakami Group with 21.4% and Hibiki Path Advisors with 5.5% have agreed to tender. </li>
<li>With the two main activists publicly engaged now agreed to tender, this looks like a done deal.</li>
</ul>


Today late in the afternoon session, the Nikkei reported that the MBO price would be bumped by "about 30%". The stock popped 4.6%. 
Post-Close, the deal is bumped from ¥1,960 to ¥2,520 (+29%). Activist holders Murakami Group with 21.4% and Hibiki Path Advisors with 5.5% have agreed to tender. 
With the two main activists publicly engaged now agreed to tender, this looks like a done deal.


[Japan Activism] Mandom (4917) Holders Get an Early Win as MBO Bidder CVC Bumps 29%

Digital Holdings, Inc. operates as an internet advertising agency. The Company provides internet advertising, digital marketing, and other related services for local small and medium-size enterprises. Digital Holdings also offers venture investment, information gathering, and digital shift support education services.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/digital-holdings-inc" target="_blank" data-smartkarma-citation="entities:1697:1" rel="noopener">Digital Holdings Inc (2389 JP)</a> jumped today after spending a week or more at levels just above the revised Tender Price of <a href="https://www.smartkarma.com/entities/hakuhodo-dy-holdings-inc" target="_blank" data-smartkarma-citation="entities:8736:1" rel="noopener">Hakuhodo Dy Holdings (2433 JP)</a>. </li>
<li>SilverCape had promised to bid ¥2,380 against Hakuhodo's ¥1,970 and the Company responded by threatening a Poison Pill against SilverCape, for relatively spurious reasons (as discussed <a href="https://www.smartkarma.com/insights/japan-activism-m-a-hakuhodo-dy-lowers-digital-holdings-2389-jp-tob-threshold-bumps-a-tiny-2-2" target="_blank" rel="noopener">here</a>).</li>
<li>Hakuhodo bid slightly more, and lowered its minimum, thereby <em>nearly</em> ensuring their success. HOWEVER.... SilverCape's CIO interviewed yesterday promised a higher price. The stock popped today. But...</li>
</ul>



Digital Holdings Inc (2389 JP) jumped today after spending a week or more at levels just above the revised Tender Price of Hakuhodo Dy Holdings (2433 JP). 
SilverCape had promised to bid ¥2,380 against Hakuhodo's ¥1,970 and the Company responded by threatening a Poison Pill against SilverCape, for relatively spurious reasons (as discussed here).
Hakuhodo bid slightly more, and lowered its minimum, thereby nearly ensuring their success. HOWEVER.... SilverCape's CIO interviewed yesterday promised a higher price. The stock popped today. But...


[Japan Activism/M&A] SilverCape Renews Its Effort on Digital HD (2389 JP) To Resolve Board Complaint

TSURUHA HOLDINGS INC. is a holding company which manages subsidiaries that operate drug stores in Hokkaido and the Tohoku area.  The Company's product line includes drugs, cosmetics, and household utensils.

<ul>
<li>A month ago I wrote <a href="https://www.smartkarma.com/insights/japan-activism-m-a-closing-in-on-the-tsuruha-partial-tender-likely-needs-to-be-higher" target="_blank" data-smartkarma-citation="insights:206132" rel="noopener">[Japan Activism/M&amp;A] - Closing In On the Tsuruha Partial Tender - Likely Needs To Be Higher</a>. Now we are &lt;2wks to the deal.  </li>
<li>At the time, I said the Partial Tender Offer Price needed to be higher than the mooted ¥2,280. <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> shares are up 10.0% in that month. </li>
<li>The three largest peers are -2.0% on average in that period. The average of 8 peers is +0.5%. I still expect the partial offer price needs to be near ¥3,100</li>
</ul>


A month ago I wrote [Japan Activism/M&amp;A] - Closing In On the Tsuruha Partial Tender - Likely Needs To Be Higher. Now we are &lt;2wks to the deal.  
At the time, I said the Partial Tender Offer Price needed to be higher than the mooted ¥2,280. Tsuruha Holdings (3391 JP) shares are up 10.0% in that month. 
The three largest peers are -2.0% on average in that period. The average of 8 peers is +0.5%. I still expect the partial offer price needs to be near ¥3,100


[Japan Activism/M&A] Thinking About the Partial Tender Trade Coming in Dec25

<ul>
<li>Today after the close, <a href="https://www.smartkarma.com/entities/hakuhodo-dy-holdings-inc" target="_blank" data-smartkarma-citation="entities:8736:1" rel="noopener">Hakuhodo Dy Holdings (2433 JP)</a> announced changes to the terms of its Tender Offer for <a href="https://www.smartkarma.com/entities/digital-holdings-inc" target="_blank" data-smartkarma-citation="entities:1697:1" rel="noopener">Digital Holdings Inc (2389 JP)</a>, which faces an overbidder in SilverCape. </li>
<li>Hakuhodo had bid ¥1,970. Silvercape came over the top with a proposed ¥2,380 but a delay for approvals. DH is fighting against SilverCape because of "remaining minority shareholder risk."</li>
<li>That's garbage. Utter blatherskite. Trumpworthy trumpery. Now Hakuhodo DY has lowered the minimum threshold making it hard to miss, and raised the price 2.3% to ¥2,015.</li>
</ul>


Today after the close, Hakuhodo Dy Holdings (2433 JP) announced changes to the terms of its Tender Offer for Digital Holdings Inc (2389 JP), which faces an overbidder in SilverCape. 
Hakuhodo had bid ¥1,970. Silvercape came over the top with a proposed ¥2,380 but a delay for approvals. DH is fighting against SilverCape because of "remaining minority shareholder risk."
That's garbage. Utter blatherskite. Trumpworthy trumpery. Now Hakuhodo DY has lowered the minimum threshold making it hard to miss, and raised the price 2.3% to ¥2,015.


[Japan Activism/M&A] Hakuhodo DY Lowers Digital Holdings (2389 JP) TOB Threshold, Bumps a Tiny 2.2%

PACIFIC INDUSTRIAL CO., LTD. manufactures tire valves, pressed parts, and electronic control devices used for automobiles.  The Company's products include tire pressure monitoring system, which let drivers know tire condition such as air pressure and its temperature.  The Company has overseas production and sales subsidiaries in Korea, Taiwan, Thailand, and the US.

<ul>
<li>The <a href="https://www.smartkarma.com/entities/pacific-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:6261:1" rel="noopener">Pacific Industrial (7250 JP)</a> "MBO" was egregiously mis-priced. I was surprised the family did it but on 23 October, they increased their bid by 42.4%, from ¥2,050 to ¥2,919/share.</li>
<li>The stock was at ¥2,735 after activist Effissimo had built a 13% stake at ¥2365. The day after the announcement, the stock opened up through terms and continues to climb.</li>
<li>Effissimo responded 4 days later, buying 2% of voting rights as the stock climbed past ¥3,000, another 1% later. Now the stock is 8+% through new terms. They're not playing.</li>
</ul>


The Pacific Industrial (7250 JP) "MBO" was egregiously mis-priced. I was surprised the family did it but on 23 October, they increased their bid by 42.4%, from ¥2,050 to ¥2,919/share.
The stock was at ¥2,735 after activist Effissimo had built a 13% stake at ¥2365. The day after the announcement, the stock opened up through terms and continues to climb.
Effissimo responded 4 days later, buying 2% of voting rights as the stock climbed past ¥3,000, another 1% later. Now the stock is 8+% through new terms. They're not playing.


[Japan M&A/Activism] - Effissimo Keeps Buying Pacific Industrial (7250) Above New Terms

Governance & Activism in Japanese Markets

Japan Activism
Governance & Activism in Japanese Markets

[Japan Activism] Mandom (4917) Holders Get an Early Win as MBO Bidder CVC Bumps 29%

Activists activisted. The company agreed to open a new bidding process when activists got too big. Now the original MBO Bidco has agreed to bid up...

Travis Lundy

[Japan Activism/M&A] SilverCape Renews Its Effort on Digital HD (2389 JP) To Resolve Board Complaint

It appears SilverCape is going to bid higher AND bid for more stock in an effort to offset the Board's (groundless) complaints about coerciveness....

Travis Lundy

[Japan Activism/M&A] Thinking About the Partial Tender Trade Coming in Dec25

Tsuruha and Welcia getting smacked late this AM and early PM - down 7% just now. This looks like an unwind of pre-positioned longs for the M _ _ _...

Travis Lundy

[Japan Activism/M&A] Hakuhodo DY Lowers Digital Holdings (2389 JP) TOB Threshold, Bumps a Tiny 2.2%

Today Hakuhodo DY bumped its deal for Digital HD by a paltry 2.2%, but it lowered the minimum so it gets to just over 50% vs 67%. If all the...

Travis Lundy

[Japan M&A/Activism] - Effissimo Keeps Buying Pacific Industrial (7250) Above New Terms

MBO Bidco extended for a committed tenderer on the last day, but if that had meant success, they didn't need to extend/announce. So they're not...

Travis Lundy