Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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

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>
<a href="https://www.reuters.com/world/americas/japans-shibaura-classified-core-national-security-amid-takeover-battle-2025-08-05/" target="_blank" rel="noopener">Reuters reports</a> that the Ministry of Finance of Japan reclassified <a href="https://www.smartkarma.com/entities/shibaura-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:12704:1" rel="noopener">Shibaura Electronics (6957 JP)</a> from a Type 1 (non-designated business sector) to Type 3 (core designated company).</li>
<li>Reportedly, Yageo’s application was made with a view to Shibaura's businesses falling under the core category. A blocked deal would set back Prime Minister Ishiba’s goal to improve China relations. </li>
<li>The change to Shibaura’s designation to core helps explain the elongated approval process, as the Ministry of Finance and Yageo need time to agree on acceptable undertakings. </li>
</ul>



Reuters reports that the Ministry of Finance of Japan reclassified Shibaura Electronics (6957 JP) from a Type 1 (non-designated business sector) to Type 3 (core designated company).
Reportedly, Yageo’s application was made with a view to Shibaura's businesses falling under the core category. A blocked deal would set back Prime Minister Ishiba’s goal to improve China relations. 
The change to Shibaura’s designation to core helps explain the elongated approval process, as the Ministry of Finance and Yageo need time to agree on acceptable undertakings. 


Shibaura Electronics (6957 JP): Core Designation Does Not Change Yageo’s Calculus

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> has extended the close of its offer for <a href="https://www.smartkarma.com/entities/shibaura-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:12704:1" rel="noopener">Shibaura Electronics (6957 JP)</a> from July 15 to August 1, the end of the waiting period for FEFTA approval. </li>
<li>Yageo remains confident of securing FEFTA approval. Blocking an acquisition of a Type 1 (non-designated business sector) company by a Taiwanese company would set a bad precedent. </li>
<li>There is a medium to high probability that Yageo secures FEFTA approval. <a href="https://www.smartkarma.com/entities/minebea-mitsumi-inc" target="_blank" data-smartkarma-citation="entities:5032:1" rel="noopener">Minebea Mitsumi (6479 JP)</a> is likely to walk as it signalled a limited appetite to match Yageo's offer. </li>
</ul>



Yageo Corporation (2327 TT) has extended the close of its offer for Shibaura Electronics (6957 JP) from July 15 to August 1, the end of the waiting period for FEFTA approval. 
Yageo remains confident of securing FEFTA approval. Blocking an acquisition of a Type 1 (non-designated business sector) company by a Taiwanese company would set a bad precedent. 
There is a medium to high probability that Yageo secures FEFTA approval. Minebea Mitsumi (6479 JP) is likely to walk as it signalled a limited appetite to match Yageo's offer. 


Shibaura Electronics (6957 JP): Drawing Nearer to a Conclusion

Equity Bottom-Up

<ul>
<li>The Berkshire Hathaway <a href="https://www.berkshirehathaway.com/2024ar/2024ar.pdf" target="_blank" rel="noopener">Annual Shareholder Letter for 2024</a> was released this weekend. Much was made in Japanese twitter-space of the comments he made on the Japanese trading houses. </li>
<li>He said Berkshire Hathaway's admiration of these companies "has consistently grown" and Berkshire likes their capital deployment, managements, and their attitude in respect to investors. They also pay themselves reasonably.</li>
<li>He mentioned Berkshire will increase their stakes somewhat in the trading houses "over time." That comment deserves some exploration, as does the comment about yen funding.</li>
</ul>


The Berkshire Hathaway Annual Shareholder Letter for 2024 was released this weekend. Much was made in Japanese twitter-space of the comments he made on the Japanese trading houses. 
He said Berkshire Hathaway's admiration of these companies "has consistently grown" and Berkshire likes their capital deployment, managements, and their attitude in respect to investors. They also pay themselves reasonably.
He mentioned Berkshire will increase their stakes somewhat in the trading houses "over time." That comment deserves some exploration, as does the comment about yen funding.


Warren Buffett and the Japanese Trading Houses I

<ul>
<li>On 13 November, <a href="https://www.smartkarma.com/entities/kansai-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:18907:1" rel="noopener">Kansai Electric Power (9503 JP)</a> announced an equity offering to raise capital for capex expenditures over the next several years. It is significantly dilutive.</li>
<li>The shares responded by falling 23% to 8-months lows of ¥1,850 last Thursday and Friday. That puts the stock at the same forward PER post-offering as it was pre-offering. </li>
<li>That's probably not an awful place to own now that the stock will have been slightly de-risked/de-levered. </li>
</ul>


On 13 November, Kansai Electric Power (9503 JP) announced an equity offering to raise capital for capex expenditures over the next several years. It is significantly dilutive.
The shares responded by falling 23% to 8-months lows of ¥1,850 last Thursday and Friday. That puts the stock at the same forward PER post-offering as it was pre-offering. 
That's probably not an awful place to own now that the stock will have been slightly de-risked/de-levered. 


Kansai Electric Power (9503 JP) - Huge Offering Is Smaller Now; Reward/Risk Skews Upwards

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 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

Shibaura Electronics (6957 JP): Core Designation Does Not Change Yageo’s Calculus

The reclassification to core, which explains the elongated approval process, should not materially impact Yageo’s approach to securing regulatory...

Arun George

Shibaura Electronics (6957 JP): Drawing Nearer to a Conclusion

There is a medium to high probability that Yageo secures FEFTA approval. Minebea is likely to walk as it signalled a limited appetite to match...

Arun George

Warren Buffett and the Japanese Trading Houses I

Today, National Indemnity - BRK's holdco for owning Japanese trading co shares - announced it had upped its stake in each of the five trading...

Travis Lundy

Kansai Electric Power (9503 JP) - Huge Offering Is Smaller Now; Reward/Risk Skews Upwards

KEPCO has fallen 23% then rebounded 2% since announcing its equity offering which dilutes 20%. The discount is worthwhile catching. The combo of...

Travis Lundy

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