Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

After the close on Friday April 28th, autoparts maker <a href="https://www.smartkarma.com/entities/12197" target="_blank" data-smartkarma-citation="entities:12197:1">JTEKT Corp (6473 JP)</a> affiliated with <a href="https://www.smartkarma.com/entities/73" target="_blank" data-smartkarma-citation="entities:73:1">Toyota Motor Corp (7203 JP)</a> announced a transaction to buy out the 66.6% of steering column maker <a href="https://www.smartkarma.com/entities/20550" target="_blank" data-smartkarma-citation="entities:20550:1">Fuji Kiko Co Ltd (7260 JP)</a> which it does not already own.The minimum to make this tender successful is a post-tender holding of 66.67%, and with the combination of JTEKT's current 33.6% holding ex-Treasury shares and the holding of <a href="https://www.smartkarma.com/entities/17528" target="_blank" data-smartkarma-citation="entities:17528:1">Tachi S Co Ltd (7239 JP)</a> which has agreed to tender its ~24.8% holding, plus the miscellaneous holdings of a few other small companies likely tied to management and the company, that gets them to 63.7%. That is pretty close. They would only need an extra 3% which is about 20% of the retail investor holding as of the last Yuho and it is probably two-thirds of the TOPIX passive holding.  And the price at ¥740/share is 2 yen higher than the highest close in 5 years. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/025/208/original/20170429_FujiKikoChart.png?1493475857" class="editor-image img-responsive" data-smartkarma-image-id="25208"></figure><div style="text-align: left;" class="content-caption">data: Bloomberg</div>Sounds straightforward. Like a done deal.But it shouldn't be.<div class="content-highlight">This is a NON-GOOD deal in more ways than one. A company is being dismantled and taken over by insiders, and is being done at potentially dodgy prices with NO FAIRNESS OPINIONS involved.</div>There may be low-risk angles for arbitrageurs to make decent money on this deal.More for subscribers below the fold...

After the close on Friday April 28th, autoparts maker JTEKT Corp (6473 JP) affiliated with Toyota Motor Corp (7203 JP) announced a transaction to buy out the 66.6% of steering column maker Fuji Kiko Co Ltd (7260 JP) which it does not already own.The minimum to make this tender successful is a post-tender holding of 66.67%, and with the combination of JTEKT's current 33.6% holding ex-Treasury shares and the holding of Tachi S Co Ltd (7239 JP) which has agreed to tender its ~24.8% holding, plus the miscellaneous holdings of a few other small companies likely tied to management and the company, that gets them to 63.7%. That is pretty close. They would only need an extra 3% which is about 20% of the retail investor holding as of the last Yuho and it is probably two-thirds of the TOPIX passive holding.  And the price at ¥740/share is 2 yen higher than the highest close in 5 years. data: BloombergSounds straightforward. Like a done deal.But it shouldn't be.This is a NON-GOOD deal in more ways than one. A company is being dismantled and taken over by insiders, and is being done at potentially dodgy prices with NO FAIRNESS OPINIONS involved.There may be low-risk angles for arbitrageurs to make decent money on this deal.More for subscribers below the fold... 

JTEKT Deal for Fuji Kiko An Awful Example of Stewardship & Governance

Japan

Fuji Kiko Co., Ltd. manufactures automobile parts. Its product includes power and manual seat adjuster systems, various pulleys for engines, steering columns,  and A/T shifters. The Company has its subsidiaries in Indonesia, Sweden, and the US.

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Fuji Kiko (7260 JP)

JTEKT Deal for Fuji Kiko An Awful Example of Stewardship & Governance

After the close on Friday April 28th, autoparts maker JTEKT Corp (6473 JP) affiliated with Toyota Motor Corp (7203 JP) announced a transaction to...

Travis Lundy

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