Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Silchester International Investors targeted the AGMs of four Japanese regional banks in which it had held shares for 12-17yrs writing open letters, and asking each for a small special dividend.</li>
<li>One was heavily over-capitalised and significant cross-holding owning <a href="https://www.smartkarma.com/entities/chugoku-bank-ltd" target="_blank" data-smartkarma-citation="entities:11177:1" rel="noopener">Chugoku Bank (8382 JP)</a> </li>
<li>Their Shareholder Proposal flopped badly. The shareholder structure isn't there to support it, now or in future, and among regional banks, this is on the "less attractive" side valuation-wise.</li>
</ul>


Silchester International Investors targeted the AGMs of four Japanese regional banks in which it had held shares for 12-17yrs writing open letters, and asking each for a small special dividend.
One was heavily over-capitalised and significant cross-holding owning Chugoku Bank (8382 JP) 
Their Shareholder Proposal flopped badly. The shareholder structure isn't there to support it, now or in future, and among regional banks, this is on the "less attractive" side valuation-wise.


JAPAN ACTIVISM:  Silchester's Chugoku Bank AGM Ploy Fails - Won't Be an Activism Target

<ul>
<li>Silchester, after holding <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> shares 16 years, becoming the largest investor, FINALLY publicly asked the bank to make a gesture to pay out a tiny special div. </li>
<li>The bank rejected them, but they took it to to the AGM. And there Silchester got rejected by the shareholders. Soundly. Hostile activism is not going to be easy here. </li>
<li>But all is not lost. Since December, the bank has raised its payout ratio to 50% and has promised to cut a piece of its cross-holdings in the MTMP.</li>
</ul>


Silchester, after holding Bank of Kyoto (8369 JP) shares 16 years, becoming the largest investor, FINALLY publicly asked the bank to make a gesture to pay out a tiny special div. 
The bank rejected them, but they took it to to the AGM. And there Silchester got rejected by the shareholders. Soundly. Hostile activism is not going to be easy here. 
But all is not lost. Since December, the bank has raised its payout ratio to 50% and has promised to cut a piece of its cross-holdings in the MTMP.


JAPAN ACTIVISM:  Silchester's Bank of Kyoto AGM Results - Activism Still Failing

David Blennerhassett

<ul>
<li>
<a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> selling its <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> shares was expected. The beginning of an open-ended share repurchase programme of Prosus and <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> shares was a welcome surprise.</li>
<li>Dye &amp; Durham has reduced its Offer price for <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration (LNK AU)</a> to $4.30/share, down from $5.50/share. It still may get board support.</li>
<li>A 40-45% discount is about the narrowest <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> should get to. For that, there is probably 15-20% upside. But like all holdco trades, trade the range.</li>
</ul>



Prosus (PRX NA) selling its JD.com (9618 HK) shares was expected. The beginning of an open-ended share repurchase programme of Prosus and Naspers (NPN SJ) shares was a welcome surprise.
Dye &amp; Durham has reduced its Offer price for Link Administration (LNK AU) to $4.30/share, down from $5.50/share. It still may get board support.
A 40-45% discount is about the narrowest Bank of Kyoto (8369 JP) should get to. For that, there is probably 15-20% upside. But like all holdco trades, trade the range.


Last Week in Event SPACE: Prosus/Naspers, Link Admin, Bank of Kyoto, Tassel, Toshiba

<ul>
<li>Bank of Kyoto has twice changed/improved its capital governance in the past six months.</li>
<li>Silchester International Investors wants it to do more, asking for a small special dividend at tomorrow's AGM. I don't think it will get it. </li>
<li>The holdco is now a better holdco trade than it was 6mos ago, and trading the range is the right way to look at it. </li>
</ul>


Bank of Kyoto has twice changed/improved its capital governance in the past six months.
Silchester International Investors wants it to do more, asking for a small special dividend at tomorrow's AGM. I don't think it will get it. 
The holdco is now a better holdco trade than it was 6mos ago, and trading the range is the right way to look at it. 


<ul>
<li>Post-Spin, <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP (BHP AU)</a> should look more like RIO. It's not clear it does, but it does move around in a way that allows one to harvest ratio noise. </li>
<li>
<a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> has been the poster child for "deep value" Japan traders and occasional wannabe activists. It has a huge equity portfolio which dwarfs market cap. </li>
<li>Fourteen years after its acquisition, <a href="https://www.smartkarma.com/entities/incitec-pivot-ltd" target="_blank" data-smartkarma-citation="entities:1127:1" rel="noopener">Incitec Pivot (IPL AU)</a> plans to demerge Dyno Nobel from its fertilizer ops. The split has been a long time coming. </li>
</ul>


Post-Spin, BHP (BHP AU) should look more like RIO. It's not clear it does, but it does move around in a way that allows one to harvest ratio noise. 

Bank of Kyoto (8369 JP) has been the poster child for "deep value" Japan traders and occasional wannabe activists. It has a huge equity portfolio which dwarfs market cap. 
Fourteen years after its acquisition, Incitec Pivot (IPL AU) plans to demerge Dyno Nobel from its fertilizer ops. The split has been a long time coming. 


Last Week in Event SPACE: BHP, Bank of Kyoto, Incitec Pivot, Yancoal, Virtus

Japan

The Bank of Kyoto, Ltd. is a regional bank in Kyoto.  The Bank provides banking services including deposits, savings, loans, foreign exchange transactions, and securities investments.  The Bank of Kyoto also provides financial services such as letter of credit, leasing, loans, and credit cards.

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Bank of Kyoto (8369 JP)

JAPAN ACTIVISM: Silchester's Chugoku Bank AGM Ploy Fails - Won't Be an Activism Target

Silchester targeted Chugoku Bank for cross-holdings. CB rejected them. Silchester asked the AGM for a small div, shareholders rejected them. It's...

Travis Lundy

JAPAN ACTIVISM: Silchester's Bank of Kyoto AGM Results - Activism Still Failing

Bank of Kyoto saw Silchester propose a special dividend at the AGM. It got fewer FOR votes than the president got AGAINST votes. Activism is tough...

Travis Lundy

Last Week in Event SPACE: Prosus/Naspers, Link Admin, Bank of Kyoto, Tassel, Toshiba

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

Bank of Kyoto - Trading the Holdco Range

The Bank of Kyoto (8369 JP) AGM is tomorrow, with a possible special div proposed by Silchester. I doubt it gets it. But BoK has twice improved...

Travis Lundy

Last Week in Event SPACE: BHP, Bank of Kyoto, Incitec Pivot, Yancoal, Virtus

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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