Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In VI, I provided granular analysis of the "minorities" tendering, and a brief analysis of What Toyota (Fudosan/Motors/etc) Might Do. This is Part VII.</li>
<li>This insight looks at the Risks - Event, Delta Hedge, Whip Risk, etc. It also looks at the Cui Bono question. That is at the heart of this transaction.</li>
<li>Incoming Toyota CEO KON-san said they tried to be fair to all. I disagree.  Undervaluation is ~¥3trln vs ToyotaGroup MktCap of ¥68trln. So Cui Bono? I have (ugly) thoughts. 👀</li>
</ul>


In VI, I provided granular analysis of the "minorities" tendering, and a brief analysis of What Toyota (Fudosan/Motors/etc) Might Do. This is Part VII.
This insight looks at the Risks - Event, Delta Hedge, Whip Risk, etc. It also looks at the Cui Bono question. That is at the heart of this transaction.
Incoming Toyota CEO KON-san said they tried to be fair to all. I disagree.  Undervaluation is ~¥3trln vs ToyotaGroup MktCap of ¥68trln. So Cui Bono? I have (ugly) thoughts. 👀


[Japan M&A/Activism] Toyota Fudosan -TICO (6201) Deal VII - Risks, Risk Mgmt, and Cui Bono?

<ul>
<li>The recent <a href="https://www.smartkarma.com/insights/japan-m-a-activism-toyota-re-deal-for-tico-6201-extended-very-few-minorities-have-tendered" target="_blank" data-smartkarma-citation="insights:221396" rel="noopener">[Japan M&amp;A/Activism] Toyota RE Deal for TICO (6201) Extended. VERY Few Minorities Have Tendered.</a> spurred a lot of questions. I try to answer a few here. </li>
<li>I have also updated the valuation, added a bit more detail into the Shareholder Structure Table, refined estimates for some assumptions.</li>
<li>Lastly, I discuss the nature of the risks in the run-up, the possibility of a bump, and what happens after. This is PART IV (or Part 1 of 2 today).</li>
</ul>


The recent [Japan M&amp;A/Activism] Toyota RE Deal for TICO (6201) Extended. VERY Few Minorities Have Tendered. spurred a lot of questions. I try to answer a few here. 
I have also updated the valuation, added a bit more detail into the Shareholder Structure Table, refined estimates for some assumptions.
Lastly, I discuss the nature of the risks in the run-up, the possibility of a bump, and what happens after. This is PART IV (or Part 1 of 2 today).


[Japan M&A/Activism] ToyotaRE-TICO (6201) Deal VI - Now 7% Thru at 1.0x BVPS... What Will Toyota Do?

Index Rebalance

<ul>
<li>Assuming the Nikkei 225 March 2026 rebal goes as expected in our <a href="https://www.smartkarma.com/insights/quiddity-index-nikkei-225-mar26-rebal-2-adds-3rd-poss-2-dels-1-cap-another-close" target="_blank" rel="noopener">final expectations insight</a>, there are likely to be two automatic ADDs and one sector catch-up ADD.</li>
<li>Higher value traded in recent months in the semis and semi-precious metals sectors has meant stocks leapt up the rankings. Other rankings are volatile. We made a slight algo change.</li>
<li>Interestingly, the third choice is likely to be a Capital Goods stock. If the Toyota Fudosan TOB fails, there is a dark horse case for <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>. </li>
</ul>


Assuming the Nikkei 225 March 2026 rebal goes as expected in our final expectations insight, there are likely to be two automatic ADDs and one sector catch-up ADD.
Higher value traded in recent months in the semis and semi-precious metals sectors has meant stocks leapt up the rankings. Other rankings are volatile. We made a slight algo change.
Interestingly, the third choice is likely to be a Capital Goods stock. If the Toyota Fudosan TOB fails, there is a dark horse case for Toyota Industries (6201 JP). 


[Quiddity Index] Nikkei 225 Sep26 Rebal Preview II - 2 Auto ADDs, 1 Extra Likely, 1 Cap

David Blennerhassett

<ul>
<li>There's (still) a LOT of upside here. IF <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> sells the Operating Business at 1x book, there's at least another ¥5,800 in this, and maybe more.</li>
<li>FY25 results reaffirm <a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>'s stub ops continue to burn cash. Deconsolidated net debt touches an all-time high. And <a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT (6823 HK)</a>'s dividend pass-through % is trending south. </li>
<li>
<a href="https://www.smartkarma.com/entities/yutaka-giken-co-ltd" target="_blank" data-smartkarma-citation="entities:4033:1" rel="noopener">Yutaka Giken (7229 JP)</a> will end up being a case study of how NOT to execute a takeover for a parent company, which is "responsible" for treating minorities fairly.</li>
</ul>


There's (still) a LOT of upside here. IF Toyota Industries (6201 JP) sells the Operating Business at 1x book, there's at least another ¥5,800 in this, and maybe more.
FY25 results reaffirm PCCW Ltd (8 HK)'s stub ops continue to burn cash. Deconsolidated net debt touches an all-time high. And HKT (6823 HK)'s dividend pass-through % is trending south. 

Yutaka Giken (7229 JP) will end up being a case study of how NOT to execute a takeover for a parent company, which is "responsible" for treating minorities fairly.


Last Week In Event SPACE: Toyota Industries, PCCW, Yutaka Giken, Ferretti, Daishin Securities

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.

<ul>
<li>At the first closing date of the <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> offer, Fudosan unsurprisingly extended the close, but surprisingly, voluntarily disclosed the level of acceptances.</li>
<li>At first glance, the disclosure of acceptances was an own goal, as the shares reached new highs, giving Elliott a gift to strengthen its call to reject the offer.</li>
<li>Alternatively, Fudosan’s disclosure could be a shrewd move to signal that its likely endgame (bump marginally above 3Q book value and possibly lower minimum) will succeed.  </li>
</ul>


At the first closing date of the Toyota Industries (6201 JP) offer, Fudosan unsurprisingly extended the close, but surprisingly, voluntarily disclosed the level of acceptances.
At first glance, the disclosure of acceptances was an own goal, as the shares reached new highs, giving Elliott a gift to strengthen its call to reject the offer.
Alternatively, Fudosan’s disclosure could be a shrewd move to signal that its likely endgame (bump marginally above 3Q book value and possibly lower minimum) will succeed.  


Toyota Industries (6201 JP): Disclosure of Acceptances an Own Goal or a Shrewd Move?

Japan

TOYOTA INDUSTRIES CORPORATION, a member of the Toyota Motor Group, assembles motor vehicles and manufactures automotive parts such as engines and air conditioner compressors.  The Company also produces industrial equipment and textile machinery as well as electronic devices such as computer modems and power inverters.

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Toyota Industries (6201 JP)

[Japan M&A/Activism] Toyota Fudosan -TICO (6201) Deal VII - Risks, Risk Mgmt, and Cui Bono?

Part VII looks at Break Risk, Event Risk, Hedge Risk, but most importantly, CUI BONO. This transaction is structured in a way possibly (not...

Travis Lundy

[Japan M&A/Activism] ToyotaRE-TICO (6201) Deal VI - Now 7% Thru at 1.0x BVPS... What Will Toyota Do?

This is Part 1 of a two-parter today. Here I go a bit more granular on Shareholder Structure, update realtime valuations, and imagine what Toyota...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal Preview II - 2 Auto ADDs, 1 Extra Likely, 1 Cap

Value traded is up across the entire market the last few months. On some stocks the change is fierce. The predictive algos deserved a refresh so...

Travis Lundy

Last Week In Event SPACE: Toyota Industries, PCCW, Yutaka Giken, Ferretti, Daishin Securities

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Toyota Industries (6201 JP): Disclosure of Acceptances an Own Goal or a Shrewd Move?

At first glance, the acceptance disclosure was an own goal. However, it could be a shrewd move to signal that Fudosan's likely endgame (bump...

Arun George

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