Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>When Makino Milling tried to block Nidec's bid but Nidec ran into approvals risk, and MBK stepped in as an alternate bidder. </li>
<li>The fact that Nidec seemed to run into China approval problems but MBK did not perhaps should have been something of a warning. Delays in Japan approvals definitely were. </li>
<li>Now the Japanese government has asked MBK to withdraw citing national security concerns according to the <a href="https://asia.nikkei.com/business/companies/japan-moves-to-block-mbk-s-makino-machine-tool-takeover-on-security-grounds" target="_blank" rel="noopener">Nikkei</a>.  First post-New-FEFTA deal block. </li>
</ul>


When Makino Milling tried to block Nidec's bid but Nidec ran into approvals risk, and MBK stepped in as an alternate bidder. 
The fact that Nidec seemed to run into China approval problems but MBK did not perhaps should have been something of a warning. Delays in Japan approvals definitely were. 
Now the Japanese government has asked MBK to withdraw citing national security concerns according to the Nikkei.  First post-New-FEFTA deal block. 


[Japan M&A] Japan Govt Quashes MBK Bid for Makino Milling (6135) - Foreign Buys of Sensitives Toast?

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>The <a href="https://asia.nikkei.com/business/companies/japan-moves-to-block-makino-machine-tool-takeover-on-security-concerns" target="_blank" rel="noopener">Nikkei reported</a> that the Japanese government has advised MBK to halt its acquisition ‌of <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> on national security grounds.</li>
<li>This event sets a precedent and will increase the risk premium for foreign takeovers of Japanese companies in core business sectors. FEFTA approval can no longer be considered low-risk.</li>
<li>Due to a significant re-rating of peers/index and Makino’s upgraded forecasts since the offer announcement, the share price fall on a deal break is likely to be modest (&lt;10%). </li>
</ul>


The Nikkei reported that the Japanese government has advised MBK to halt its acquisition ‌of Makino Milling Machine Co (6135 JP) on national security grounds.
This event sets a precedent and will increase the risk premium for foreign takeovers of Japanese companies in core business sectors. FEFTA approval can no longer be considered low-risk.
Due to a significant re-rating of peers/index and Makino’s upgraded forecasts since the offer announcement, the share price fall on a deal break is likely to be modest (&lt;10%). 


Makino Milling Machine (6135 JP): Precedent Set as FEFTA Approval Is Rumoured to Be Not Forthcoming

<ul>
<li>Due to the delay in securing FEFTA approval, <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> has announced that the start of the MBK tender offer has been delayed to late June. </li>
<li>Makino is classified as a Type 3 company (core business), suggesting that MBK is negotiating undertakings to secure FEFTA approval.</li>
<li>Despite mitigating factors, the case for a bump is increasingly persuasive given peers' material reratings, Makino’s solid financial performance and lack of irrevocables.  </li>
</ul>


Due to the delay in securing FEFTA approval, Makino Milling Machine Co (6135 JP) has announced that the start of the MBK tender offer has been delayed to late June. 
Makino is classified as a Type 3 company (core business), suggesting that MBK is negotiating undertakings to secure FEFTA approval.
Despite mitigating factors, the case for a bump is increasingly persuasive given peers' material reratings, Makino’s solid financial performance and lack of irrevocables.  


Makino Milling Machine (6135 JP): Tender Delayed as the Case for a Bump Is Becoming Persuasive

Founder and CEO, Europacifica Consulting

Naomi Fink

Founder and CEO

Europacifica Consulting

Macroeconomics

<p>Empirical data on the drivers of Japanese productivity are sadly not at the forefront of Abenomics, but they should be.  Europacifica CEO Naomi Fink has published, over the last year, two papers with Columbia University's CJEB which show exactly why this is.  The first of these papers illustrates why and where we find evidence that the BOJ's fight against deflation is insufficient (although it may be necessary) to cure Japan's ills:</p><h2>Why Overcoming Deflation Alone is Not Enough</h2><p>There is "bad…</p>

Empirical data on the drivers of Japanese productivity are sadly not at the forefront of Abenomics, but they should be.  Europacifica CEO Naomi Fink has published, over the last year, two papers with Columbia University's CJEB which show exactly why this is.  The first of these papers illustrates why and where we find evidence that the BOJ's fight against deflation is insufficient (although it may be necessary) to cure Japan's ills:Why Overcoming Deflation Alone is Not EnoughThere is "bad…

Japan Non-IT Industries: Overcoming Deflation Not Enough

Tokyo Electric Power (TEPCO) / Event-Driven

<ul>
<li>15 years ago last week, Japan was struck by a huge earthquake accompanied by a tsunami causing nearly 20,000 deaths, and knocking out a TEPCO nuclear power plant, causing disaster.</li>
<li>The govt+public blamed TEPCO, which has paid out ¥11trln+ of compensation so far. 15yrs later, the company is trying to find a way to grow its way out of debt.</li>
<li>Today, the Asahi said alliance proposals had come in, including a takeover proposal. The stock went limit up. This is early, and there are LOTS of considerations.</li>
</ul>


15 years ago last week, Japan was struck by a huge earthquake accompanied by a tsunami causing nearly 20,000 deaths, and knocking out a TEPCO nuclear power plant, causing disaster.
The govt+public blamed TEPCO, which has paid out ¥11trln+ of compensation so far. 15yrs later, the company is trying to find a way to grow its way out of debt.
Today, the Asahi said alliance proposals had come in, including a takeover proposal. The stock went limit up. This is early, and there are LOTS of considerations.


[Japan Event] Rumblings at TEPCO (9501) Send the Stock Limit Up

Japan

Electric Power Development Co.,Ltd. generates, transmits, distributes, and sells electric power using hydroelectric, wind-power, nuclear, coal-fired and other thermal power stations throughout Japan.

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Electric Power Development C (9513 JP)

[Japan M&A] Japan Govt Quashes MBK Bid for Makino Milling (6135) - Foreign Buys of Sensitives Toast?

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Makino Milling Machine (6135 JP): Precedent Set as FEFTA Approval Is Rumoured to Be Not Forthcoming

FEFTA-related deal break is rare. Due to a significant re-rating of peers/index and upgraded forecasts since the offer announcement, the share...

Arun George

Makino Milling Machine (6135 JP): Tender Delayed as the Case for a Bump Is Becoming Persuasive

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Arun George

Japan Non-IT Industries: Overcoming Deflation Not Enough

Empirical data on the drivers of Japanese productivity are sadly not at the forefront of Abenomics, but they should be. Europacifica CEO Naomi...

Naomi Fink

[Japan Event] Rumblings at TEPCO (9501) Send the Stock Limit Up

TEPCO went limit up yesterday on a pre-market article in the Asahi about alliance proposals (in response to January call for alliance) including...

Travis Lundy

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