Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aruhi-corp" target="_blank" data-smartkarma-citation="entities:26072:1" rel="noopener">Aruhi Corp (7198 JP)</a> is under Tender Offer by <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> which wants to buy back in and expand the offering through SBI and <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a>. </li>
<li>The Tender Offer was expected to close on Monday, and Aruhi earnings were expected on the 10th of November. Today Aruhi changed its forecasts, so SBI extended the tender. </li>
<li>This engenders a bit of 🧐👀 on my part, but we gotta go with the flow. Discussion ensues. And watch for trading opportunities.</li>
</ul>

<ul>
<li>Yesterday, <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> announced it would launch a tender offer to buy 33.4-51% of <a href="https://www.smartkarma.com/entities/aruhi-corp" target="_blank" data-smartkarma-citation="entities:26072:1" rel="noopener">Aruhi Corp (7198 JP)</a> at ¥1,500/share - a 48.5% premium to the close. </li>
<li>ARUHI - Japan's largest "mortgage bank" - was listed in late 2017. Long ago, its predecessor was named SBI Mortgage. This is SBI buying back in. </li>
<li>Inside we look at valuations, shareholder structure, pro-ration. There are opportunities here.</li>
</ul>

David Blennerhassett

<ul>
<li>For the month of November, 11 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$20bn.</li>
<li>The average premium for the new deals announced (or first discussed) in November was ~52%, and a year-to-date average of 41%.</li>
<li>This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.</li>
</ul>

<ul>
<li>The TOPIX October FFW rebalance is Friday at the close. </li>
<li>It is still ¥2trln+ to buy and ¥2trln+ to sell. And there are some big names. A spreadsheet is attached with all the flows. </li>
<li>Surprisingly, the top 40 Z-scores on each side have traded in a VERY tight range for the 6 weeks prior to the announcement and the two weeks post. Very weird.</li>
</ul>

<ul>
<li>As a follow-on to <a href="https://www.smartkarma.com/insights/topix-october-2022-rebal-big-names-with-big-flows" target="_blank" data-smartkarma-citation="insights:81835" rel="noopener">TOPIX October 2022 Rebal - BIG Names with BIG Flows</a> which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.</li>
<li>In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.</li>
<li>Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals - might be worthwhile. Otherwise, pick your spots. Use the flow.</li>
</ul>

Japan

ARUHI Corporation offers finance services. The Company provides mortgage lending, stock acquisition, and other services. ARUHI also operates bank agency, insurance agency, and other businesses.

Aruhi Corp - 7198 JP

Description