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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a>’s JPY8,620 offer for <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl Corp (4921 JP)</a> closes on 29 July. The shares have traded above terms for 25 out of the 26 trading days.</li>
<li>MY.Alpha Management has amassed 10.3 million shares (8.51% ownership ratio) with several purchases above terms. MY.Alpha could catalyse other shareholders to rally against a light offer. </li>
<li>The emergence of MY.Alpha, the high volume above terms, peers re-rating, the required minority acceptance rate, and an offer unattractive to historical trading ranges increase the probability of a bump. </li>
</ul>



Kirin Holdings (2503 JP)’s JPY8,620 offer for Fancl Corp (4921 JP) closes on 29 July. The shares have traded above terms for 25 out of the 26 trading days.
MY.Alpha Management has amassed 10.3 million shares (8.51% ownership ratio) with several purchases above terms. MY.Alpha could catalyse other shareholders to rally against a light offer. 
The emergence of MY.Alpha, the high volume above terms, peers re-rating, the required minority acceptance rate, and an offer unattractive to historical trading ranges increase the probability of a bump. 


Fancl (4921 JP): Evaluating the Potential of Kirin (2503 JP) Offer Bump

<ul>
<li>Murakami's City Index Eleventh entity reported a 5.11% position in <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>. The share purchases started on 19 March, the day of the tender start.</li>
<li>Murakami’s average buy-in price of JPY4,346.22 per share is broadly in line with the JPY4,350 tender offer. </li>
<li>Murakami's disclosure suggests two possibilities: starting an activist campaign for a bump or pursuing the appraisal process to determine a fair value. We think the latter is likely. </li>
</ul>


Murakami's City Index Eleventh entity reported a 5.11% position in JSR Corp (4185 JP). The share purchases started on 19 March, the day of the tender start.
Murakami’s average buy-in price of JPY4,346.22 per share is broadly in line with the JPY4,350 tender offer. 
Murakami's disclosure suggests two possibilities: starting an activist campaign for a bump or pursuing the appraisal process to determine a fair value. We think the latter is likely. 


JSR Corporation (4185 JP): Murakami Becomes a Substantial Shareholder

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a> has announced that the pre-condition for the <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> tender offer is satisfied. The offer terms are unchanged at JPY10,360 per share. </li>
<li>The offer is arguably light due to the market re-rating, does not reflect significant synergies and is below the midpoint of the IFA DCF valuation range. </li>
<li>Nevertheless, the offer will likely succeed as it represents an all-time high, with no vocal opposition, an achievable 30.2% minority acceptance rate, and the shares never trading through terms. </li>
</ul>



Lawson Inc (2651 JP) has announced that the pre-condition for the KDDI Corp (9433 JP) tender offer is satisfied. The offer terms are unchanged at JPY10,360 per share. 
The offer is arguably light due to the market re-rating, does not reflect significant synergies and is below the midpoint of the IFA DCF valuation range. 
Nevertheless, the offer will likely succeed as it represents an all-time high, with no vocal opposition, an achievable 30.2% minority acceptance rate, and the shares never trading through terms. 


Lawson (2651 JP): KDDI Corp (9433 JP) Tender Offer Launches

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>For the month of January 2024, 8 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$2bn.</li>
<li>The average premium for the new transactions announced (or first discussed) in January was ~34%. </li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of January 2024, 8 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$2bn.
The average premium for the new transactions announced (or first discussed) in January was ~34%. 
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, Jan 2024: Newmark, Eureka, Aoki, Medley, Payroll, Kerry Express, Genetron, TDCX

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life (8750 JP)</a> has the wherewithal, and probably the synergies to make a bump for <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a> work. M3 is clearly not in the driver's seat.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-united-network-a" target="_blank" data-smartkarma-citation="entities:12620:1" rel="noopener">China United Network (600050 CH)</a> is, for all intent and purpose, a pseudo-A to <a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom (762 HK)</a>. Go long Unicom, short United due to Unicom's significantly cheaper valuation.</li>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2178:1" rel="noopener">Zhejiang Expressway (576 HK)</a> has had a stonking run since its rights issue. Look to unwind this set-up and take the other side: short Expressway, long <a href="https://www.smartkarma.com/entities/zheshang-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:29981:1" rel="noopener">Zheshang Securities (601878 CH)</a>.
</li>
</ul>



Dai Ichi Life (8750 JP) has the wherewithal, and probably the synergies to make a bump for Benefit One (2412 JP) work. M3 is clearly not in the driver's seat.

China United Network (600050 CH) is, for all intent and purpose, a pseudo-A to China Unicom (762 HK). Go long Unicom, short United due to Unicom's significantly cheaper valuation.

Zhejiang Expressway (576 HK) has had a stonking run since its rights issue. Look to unwind this set-up and take the other side: short Expressway, long Zheshang Securities (601878 CH).



Last Week in Event SPACE: Benefit One, China Unicom, Zhejiang Expressway/ Zheshang Sec, Hollysys

Japan

Taisho Pharmaceutical Holdings Company Ltd. produces and sells pharmaceuticals, foods, and  other related products. The Company also provides insurance agency and information processing services and operates hotel businesses.

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Taisho Pharmaceutical Holdin (4581 JP)

Fancl (4921 JP): Evaluating the Potential of Kirin (2503 JP) Offer Bump

Kirin has extended the tender offer period from 29 July to 13 August (40 business days). Kirin believes the JPY2,690 offer sufficiently reflects...

Arun George

JSR Corporation (4185 JP): Murakami Becomes a Substantial Shareholder

Murakami's disclosure suggests two possibilities: starting an activist campaign for a bump or pursuing the appraisal process to determine a fair...

Arun George

Lawson (2651 JP): KDDI Corp (9433 JP) Tender Offer Launches

On balance, the offer will likely succeed. At the last close and for a 7 May payment, the gross and annualised spread is 0.5% and 5.4%, respectively.

Arun George

(Mostly) Asia M&A, Jan 2024: Newmark, Eureka, Aoki, Medley, Payroll, Kerry Express, Genetron, TDCX

For the month of January 2024, 8 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of...

David Blennerhassett

Last Week in Event SPACE: Benefit One, China Unicom, Zhejiang Expressway/ Zheshang Sec, Hollysys

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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