IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Fast Fitness Japan, Inc. owns and operates fitness clubs. The Company offers gym and sports facilities and training. Fast Fitness Japan provides its services throughout Japan.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fast-fitness-japan-inc" target="_blank" data-smartkarma-citation="entities:31510:1" rel="noopener">Fast Fitness Japan Inc (7092 JP)</a> has recommended a JGIA-sponsored MBO at JPY2,315, a 29.3% premium to the undisturbed price (31 October).</li>
<li>There was media speculation about a tender offer last month. The offer is arguably light as it is below the mid-point of the IFA DCF valuation range. </li>
<li>This is a done deal as the irrevocables to tender (20.65% ownership ratio) exceed the lower limit of the tender offer (17.12% ownership ratio).</li>
</ul>



Fast Fitness Japan Inc (7092 JP) has recommended a JGIA-sponsored MBO at JPY2,315, a 29.3% premium to the undisturbed price (31 October).
There was media speculation about a tender offer last month. The offer is arguably light as it is below the mid-point of the IFA DCF valuation range. 
This is a done deal as the irrevocables to tender (20.65% ownership ratio) exceed the lower limit of the tender offer (17.12% ownership ratio).


Fast Fitness Japan (7092 JP): JGIA-Sponsored MBO Is a Done Deal

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

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%

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mandom-corp" target="_blank" data-smartkarma-citation="entities:8353:1" rel="noopener">Mandom Corp (4917 JP)</a> has disclosed that the CVC-sponsored MBO price has increased by 28.6% from JPY1,960 to JPY2,520.</li>
<li>The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its proceeds into the offeror's parent entity.</li>
<li>The revised terms are attractive, and this is a done deal. The offer closes on 18 December, with payment from 25 December.</li>
</ul>



Mandom Corp (4917 JP) has disclosed that the CVC-sponsored MBO price has increased by 28.6% from JPY1,960 to JPY2,520.
The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its proceeds into the offeror's parent entity.
The revised terms are attractive, and this is a done deal. The offer closes on 18 December, with payment from 25 December.


Mandom (4917 JP): A Big Win for Activists as CVC-Sponsored MBO Price Raised to JPY2,520

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

<ul>
<li>The reason for increasing MBOs is due to difficulty for family-owned companies to transfer management control to descendants, rising % independent directors and tradable shares, alongside increased burdens of disclosures.</li>
<li>It's natural for the founding family to choose MBO when they believe that, as things stand, they cannot achieve their paramount mission of passing on management control to future generations.</li>
<li>Considering the benefits gained from being listed, the investment has more than paid for itself. Therefore, founder-family companies prioritizing the transfer of management control to descendants will pursue MBOs.</li>
</ul>


The reason for increasing MBOs is due to difficulty for family-owned companies to transfer management control to descendants, rising % independent directors and tradable shares, alongside increased burdens of disclosures.
It's natural for the founding family to choose MBO when they believe that, as things stand, they cannot achieve their paramount mission of passing on management control to future generations.
Considering the benefits gained from being listed, the investment has more than paid for itself. Therefore, founder-family companies prioritizing the transfer of management control to descendants will pursue MBOs.


Background of the Increase in MBOs: Different from the Assumptions at the Time of the IPO

STAR MICRONICS CO., LTD. develops and manufactures electronics. The Company's products include point-of-sale printers, CNC automatic lathes, wristwatch components and hard disk drive components.  STAR MICRONICS has three business areas; special products, machine tools, and precision products.

<ul>
<li>Today after the close, well-known Japan engagement fund Taiyo Pacific Partners announced a deal to buy <a href="https://www.smartkarma.com/entities/star-micronics-co-ltd" target="_blank" data-smartkarma-citation="entities:9567:1" rel="noopener">Star Micronics (7718 JP)</a> for ¥2,210/share. They've been involved small-big-small for 20yrs.</li>
<li>The company launched a new capital plan and MTMP in February. Cash-rich, it needed no money to grow aggressively. So TPP proposed buying a third of the company. Board agreed.</li>
<li>Despite <em>ActionsToImplementManagementConsciousOfSharePriceAndCostOfCapital</em> announced February, in April-November the Board decided to sell the entire company to TPP at &lt;1x book. This is borderline outrageous. It deserves notice and complaint.</li>
</ul>


Today after the close, well-known Japan engagement fund Taiyo Pacific Partners announced a deal to buy Star Micronics (7718 JP) for ¥2,210/share. They've been involved small-big-small for 20yrs.
The company launched a new capital plan and MTMP in February. Cash-rich, it needed no money to grow aggressively. So TPP proposed buying a third of the company. Board agreed.
Despite ActionsToImplementManagementConsciousOfSharePriceAndCostOfCapital announced February, in April-November the Board decided to sell the entire company to TPP at &lt;1x book. This is borderline outrageous. It deserves notice and complaint.


[Japan M&A] Taiyo Pacific Offers ¥2,210 for Star Micronics (7718) Completing the Shareholder Ripoff

Japan MBOs
Insights on Japanese MBOs

Fast Fitness Japan (7092 JP): JGIA-Sponsored MBO Is a Done Deal

The offer is arguably light as it is below the mid-point of the IFA DCF valuation range. Nevertheless, this is a done deal as irrevocables exceed...

Arun George

[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

Mandom (4917 JP): A Big Win for Activists as CVC-Sponsored MBO Price Raised to JPY2,520

The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its...

Arun George

Background of the Increase in MBOs: Different from the Assumptions at the Time of the IPO

I would like to discuss the issues on the Nikkei newspaper article dated October 27, titled “Is That MBO Really Necessary? The Attitude of...

Metrical Inc

[Japan M&A] Taiyo Pacific Offers ¥2,210 for Star Micronics (7718) Completing the Shareholder Ripoff

The MBO is the culmination of an concerted exercise in bad governance. The Board has agreed to sell the entire company this year at <1x book...

Travis Lundy