Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>When EQT launched its deal for <a href="https://www.smartkarma.com/entities/carenet-inc" target="_blank" data-smartkarma-citation="entities:4001:1" rel="noopener">Carenet Inc (2150 JP)</a> two weeks ago, I thought it opaque, and light, and strangely lacking in information which <em>should</em> be there. </li>
<li>It has not gotten clearer, though three days ago, the largest foreign shareholder as of the announcement reported they had lowered their position by 3.77% (4.22% of votes).</li>
<li>Then yesterday, someone else reported they had gone above 5%. The data implied in that filing suggests this may have legs. I'd buy through terms.</li>
</ul>


When EQT launched its deal for Carenet Inc (2150 JP) two weeks ago, I thought it opaque, and light, and strangely lacking in information which should be there. 
It has not gotten clearer, though three days ago, the largest foreign shareholder as of the announcement reported they had lowered their position by 3.77% (4.22% of votes).
Then yesterday, someone else reported they had gone above 5%. The data implied in that filing suggests this may have legs. I'd buy through terms.


[Japan M&A] CareNet (2150 JP) - Opaque LBO/MBO Garners New Attention from Existing Shareholder

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>Kaname Capital reported a 5.80% ownership ratio in <a href="https://www.smartkarma.com/entities/carenet-inc" target="_blank" data-smartkarma-citation="entities:4001:1" rel="noopener">Carenet Inc (2150 JP)</a>. Most of the shares were purchased on August 18 and 19, i.e., after the announcement of the offer.</li>
<li>Kaname has a recent history of agitating for a bump in the <a href="https://www.smartkarma.com/entities/proto-corp" target="_blank" data-smartkarma-citation="entities:2511:1" rel="noopener">Proto Corp (4298 JP)</a> tender offer. Kaname failed to prevent Proto from being privatised.</li>
<li>EQT will initially take a wait-and-see approach. If Kaname acquires a 10% stake, EQT will start to worry, but it has several options to respond. </li>
</ul>


Kaname Capital reported a 5.80% ownership ratio in Carenet Inc (2150 JP). Most of the shares were purchased on August 18 and 19, i.e., after the announcement of the offer.
Kaname has a recent history of agitating for a bump in the Proto Corp (4298 JP) tender offer. Kaname failed to prevent Proto from being privatised.
EQT will initially take a wait-and-see approach. If Kaname acquires a 10% stake, EQT will start to worry, but it has several options to respond. 


CareNet (2150 JP): Kaname Capital Is Potentially a Headache for EQT

<ul>
<li>Todfay after the close, EQT and <a href="https://www.smartkarma.com/entities/carenet-inc" target="_blank" data-smartkarma-citation="entities:4001:1" rel="noopener">Carenet Inc (2150 JP)</a> announced an EQT SPC would launch a TOB to buy out the medical platform business. </li>
<li>A growthy business so the multiple looks light. But the founder and his incubation fund is selling. That's 19%. Insiders/crossholders hold another 25%. One recent seller still has 10%.</li>
<li>This looks like it gets done, but it isn't at the highs of 4+ years ago. Some retail may be upset. </li>
</ul>


Todfay after the close, EQT and Carenet Inc (2150 JP) announced an EQT SPC would launch a TOB to buy out the medical platform business. 
A growthy business so the multiple looks light. But the founder and his incubation fund is selling. That's 19%. Insiders/crossholders hold another 25%. One recent seller still has 10%.
This looks like it gets done, but it isn't at the highs of 4+ years ago. Some retail may be upset. 


[Japan M&A] CareNet (2150 JP) MBO-Ish LBO of Medical Platform Biz; Light. SUPER Opaque Process.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/carenet-inc" target="_blank" data-smartkarma-citation="entities:4001:1" rel="noopener">Carenet Inc (2150 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/eqt-ab" target="_blank" data-smartkarma-citation="entities:28922:1" rel="noopener">EQT (EQT SS)</a> at JPY1,130, a 47.3% premium to the last close.</li>
<li>Despite the lack of an auction, the offer is reasonable as it aligns with the midpoint of the IFA DCF valuation range and at a premium to historical ranges. </li>
<li>Irrevocables to accept represent a 17.03% ownership ratio. This is likely a done deal with payment from 7 October.</li>
</ul>



Carenet Inc (2150 JP) has recommended a tender offer from EQT (EQT SS) at JPY1,130, a 47.3% premium to the last close.
Despite the lack of an auction, the offer is reasonable as it aligns with the midpoint of the IFA DCF valuation range and at a premium to historical ranges. 
Irrevocables to accept represent a 17.03% ownership ratio. This is likely a done deal with payment from 7 October.


CareNet (2150 JP): EQT’s Tender Offer at JPY1,130

<ul>
<li>
<a href="https://www.smartkarma.com/entities/medical-data-vision-co-ltd" target="_blank" data-smartkarma-citation="entities:8367:1" rel="noopener">Medical Data Vision (3902 JP)</a> has recommended a tender offer from Nippon Life at JPY1,693, a 212.4% premium to the last close.</li>
<li>The substantial takeover premium reflects the outcome of an auction and <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> willingness to share TOB tax benefits with minority shareholders. </li>
<li>The substantial takeover premium also ensures that this is a done deal. The tender closes on 3 February, with payment commencing from 9 February. </li>
</ul>



Medical Data Vision (3902 JP) has recommended a tender offer from Nippon Life at JPY1,693, a 212.4% premium to the last close.
The substantial takeover premium reflects the outcome of an auction and SBI Holdings (8473 JP) willingness to share TOB tax benefits with minority shareholders. 
The substantial takeover premium also ensures that this is a done deal. The tender closes on 3 February, with payment commencing from 9 February. 


Medical Data Vision (3902 JP): Nippon Life’s Tender Offer at JPY1,693 (3x Last Close)

Japan

CareNet, Inc. provides medicine and medical related information for doctors through Internet, satellite broadcasting, and DVD.  The Company also collects marketing information related to medicine and provides those data to pharmaceutical companies.

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Carenet Inc (2150 JP)

[Japan M&A] CareNet (2150 JP) - Opaque LBO/MBO Garners New Attention from Existing Shareholder

CareNet may be under activist-ish-y attack. One investor who has been noisy in smallcap takeover space before has increased post-announcement. I'd...

Travis Lundy

CareNet (2150 JP): Kaname Capital Is Potentially a Headache for EQT

Kaname has a recent history of agitating for a bump, but was unsuccessful. It's early days, and EQT will take a wait-and-see approach, but has...

Arun George

[Japan M&A] CareNet (2150 JP) MBO-Ish LBO of Medical Platform Biz; Light. SUPER Opaque Process.

EQT buys out CareNet. Growthy medical platform business bought at low-mid teens EV/EBITDA but the Board presents zero information about forecasts...

Travis Lundy

CareNet (2150 JP): EQT’s Tender Offer at JPY1,130

Despite the lack of an auction, the offer is reasonable as it aligns with the midpoint of the IFA DCF valuation range and at a premium to...

Arun George

Medical Data Vision (3902 JP): Nippon Life’s Tender Offer at JPY1,693 (3x Last Close)

The substantial takeover premium reflects the outcome of an auction and SBI Holdings' willingness to share TOB tax benefits with minority...

Arun George

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