Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

In mid-December 2020, <a href="https://www.smartkarma.com/entities/idemitsu-kosan-co-ltd" target="_blank" data-smartkarma-citation="entities:109:1" rel="noopener">Idemitsu Kosan (5019 JP)</a> launched a lowball Tender Offer for its 51% subsidiary <a href="https://www.smartkarma.com/entities/toa-oil-co-ltd" target="_blank" data-smartkarma-citation="entities:11021:1" rel="noopener">Toa Oil Co Ltd (5008 JP)</a>. It was not the right bid, and I discussed this before the stock started trading the next business day in <a href="https://www.smartkarma.com/insights/idemitsu-launches-lowball-tender-offer-for-subsidiary-toa-oil-5008" target="_blank" data-smartkarma-citation="insights:46384" rel="noopener">Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008)</a>. 
<div class="content-highlight">
There are MULTIPLE reasons why the bid as presented did not value Toa Oil correctly. The reasons range from Sum Of The Parts valuation, liquidation scenarios, and private market bidder value, to simply measuring replacement value.
</div>
There was already a large shareholder, Cornwall Capital. They had just started buying more, as a large shareholder filing amendment showed the same day as the Idemitsu announcement. After the Tender Offer started, they started buying more, then more. And did so above terms. 
The stock climbed above terms the first day it was able to trade there. Then it did not fall until the Tender Offer went ex-. Since it went free to trade, it has closed below terms once, post deal failure.
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Coverage of this deal was presented in the insights listed below.
<table class="table table-striped">
<tbody>
<tr>
<td colspan="2" style="width: 723.636px;">
<h2>List of insights on Toa Oil (5008) Tender Offer by Idemitsu (5019)</h2>
</td>
</tr>
<tr>
<td style="width: 130px;">Date Published</td>
<td style="width: 572.727px;">
Title / Explanation
</td>
</tr>
<tr>
<td style="width: 130px;">16 Dec 2020</td>
<td style="width: 572.727px;"><a href="https://www.smartkarma.com/insights/idemitsu-launches-lowball-tender-offer-for-subsidiary-toa-oil-5008" target="_blank" data-smartkarma-citation="insights:46384" rel="noopener">Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008)</a> </td>
</tr>
<tr>
<td style="width: 130px;"></td>
<td style="width: 572.727px;">Discussion of the nature of the asset, why it is the wrong price. </td>
</tr>
<tr>
<td style="width: 130px;">13 Jan 2021</td>
<td style="width: 572.727px;"><a href="https://www.smartkarma.com/insights/toa-oil-5008-tender-offer-update-looks-bumpity" target="_blank" data-smartkarma-citation="insights:46996" rel="noopener">Toa Oil (5008) Tender Offer Update - Looks Bumpity.</a> </td>
</tr>
<tr>
<td style="width: 130px;"></td>
<td style="width: 572.727px;">Article in Sentaku, breakdown of location of refinery assets in the Tokyo Bay Area, and why it makes sense to look at a potentially different outcome involving <a href="https://www.smartkarma.com/entities/eneos-holdings-inc" target="_blank" data-smartkarma-citation="entities:638:1" rel="noopener">ENEOS Holdings (5020 JP)</a> </td>
</tr>
<tr>
<td style="width: 130px;">31 Jan 2021</td>
<td style="width: 572.727px;"><a href="https://www.smartkarma.com/insights/toa-oil-5008-tender-offer-updated-update-still-looks-bumpity" target="_blank" data-smartkarma-citation="insights:47625" rel="noopener">Toa Oil (5008) Tender Offer Updated Update - STILL Looks Bumpity</a> </td>
</tr>
<tr>
<td style="width: 130px;"></td>
<td style="width: 572.727px;">Shares climbing, profits soaring. </td>
</tr>
<tr>
<td style="width: 130px;">12 Feb 2021</td>
<td style="width: 572.727px;"><a href="https://www.smartkarma.com/insights/toa-oil-5008-tender-has-the-dog-caught-the-car" target="_blank" data-smartkarma-citation="insights:48018" rel="noopener">Toa Oil (5008) Tender - Has the Dog Caught the Car?</a> </td>
</tr>
<tr>
<td style="width: 130px;"></td>
<td style="width: 572.727px;">Profits, a Bump, Analysis of the Tank Farm value, and the value of investors making noise</td>
</tr>
<tr>
<td style="width: 130px;">17 Feb 2021</td>
<td style="width: 572.727px;"><a href="https://www.smartkarma.com/insights/toa-oil-5008-the-dog-has-caught-the-car-but-beware-mangalores" target="_blank" data-smartkarma-citation="insights:48228" rel="noopener">Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores</a> </td>
</tr>
<tr>
<td style="width: 130px;"></td>
<td style="width: 572.727px;">The Tender Offer is blocked, but Idemitsu has historical form in diluting noisy minority shareholders to get its way. What to watch for going forward.  And a gif of Mangalores.</td>
</tr>
<tr>
<td colspan="2" style="width: 723.636px;"></td>
</tr>
<tr>
<td colspan="2" style="width: 723.636px;">
<h3>Background</h3>
</td>
</tr>
<tr>
<td style="width: 130px;">2 Jan 2016</td>
<td style="width: 572.727px;"><a href="https://www.smartkarma.com/insights/japan-refiner-mergers-antitrust-approvals-grouped-together" target="_blank" rel="noopener">Japan Refiner Mergers:  Antitrust Approvals Grouped Together</a></td>
</tr>
</tbody>
</table>
Eventually, the deal failed. And the company reinstated its dividend for March 2021 at the same level as it had originally forecast for the year back in July 2020 - ¥40/share (-20% yoy).
This was, to my knowledge, the first deal where a Japanese parent would buy out a Japanese subsidiary which ever failed. 
The problem is, that doesn't change Idemitsu's mind. It still wants to consolidate and integrate refinery operations based on demand for refined products dropping even more radically than expected. 
This week, there was a Nikkei article/op-ed out after the deal failed and it caused the stock to pop 13.3% the day it came out. The stock closed today 10.5% above the original Tender Offer terms. 
The <a href="https://www.nikkei.com/article/DGXZQOGD17D3H0X10C21A2000000/?unlock=1" target="_blank" rel="noopener">article/op-ed</a> was... kind of obvious. And not terribly insightful. It is worth a read, and then it is worth thinking about one's rebuttals.
More below.

In mid-December 2020, Idemitsu Kosan (5019 JP) launched a lowball Tender Offer for its 51% subsidiary Toa Oil Co Ltd (5008 JP). It was not the right bid, and I discussed this before the stock started trading the next business day in Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008). 

There are MULTIPLE reasons why the bid as presented did not value Toa Oil correctly. The reasons range from Sum Of The Parts valuation, liquidation scenarios, and private market bidder value, to simply measuring replacement value.

There was already a large shareholder, Cornwall Capital. They had just started buying more, as a large shareholder filing amendment showed the same day as the Idemitsu announcement. After the Tender Offer started, they started buying more, then more. And did so above terms. 
The stock climbed above terms the first day it was able to trade there. Then it did not fall until the Tender Offer went ex-. Since it went free to trade, it has closed below terms once, post deal failure.




Coverage of this deal was presented in the insights listed below.




List of insights on Toa Oil (5008) Tender Offer by Idemitsu (5019)



Date Published

Title / Explanation



16 Dec 2020
Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008) 



Discussion of the nature of the asset, why it is the wrong price. 


13 Jan 2021
Toa Oil (5008) Tender Offer Update - Looks Bumpity. 



Article in Sentaku, breakdown of location of refinery assets in the Tokyo Bay Area, and why it makes sense to look at a potentially different outcome involving ENEOS Holdings (5020 JP) 


31 Jan 2021
Toa Oil (5008) Tender Offer Updated Update - STILL Looks Bumpity 



Shares climbing, profits soaring. 


12 Feb 2021
Toa Oil (5008) Tender - Has the Dog Caught the Car? 



Profits, a Bump, Analysis of the Tank Farm value, and the value of investors making noise


17 Feb 2021
Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores 



The Tender Offer is blocked, but Idemitsu has historical form in diluting noisy minority shareholders to get its way. What to watch for going forward.  And a gif of Mangalores.






Background



2 Jan 2016
Japan Refiner Mergers:  Antitrust Approvals Grouped Together



Eventually, the deal failed. And the company reinstated its dividend for March 2021 at the same level as it had originally forecast for the year back in July 2020 - ¥40/share (-20% yoy).
This was, to my knowledge, the first deal where a Japanese parent would buy out a Japanese subsidiary which ever failed. 
The problem is, that doesn't change Idemitsu's mind. It still wants to consolidate and integrate refinery operations based on demand for refined products dropping even more radically than expected. 
This week, there was a Nikkei article/op-ed out after the deal failed and it caused the stock to pop 13.3% the day it came out. The stock closed today 10.5% above the original Tender Offer terms. 
The article/op-ed was... kind of obvious. And not terribly insightful. It is worth a read, and then it is worth thinking about one's rebuttals.
More below.

Toa Oil (5008) - Idemitsu Looking To The Next Attempt?

Event-Driven

True to the sentiment expressed by the <a href="https://www.smartkarma.com/entities/idemitsu-kosan-co-ltd" target="_blank" data-smartkarma-citation="entities:109:1" rel="noopener">Idemitsu Kosan (5019 JP)</a> Finance Dept chief who spoke at the earnings news conference last week, Idemitsu Kosan did not change the price on its ¥2450/share Tender Offer for <a href="https://www.smartkarma.com/entities/toa-oil-co-ltd" target="_blank" data-smartkarma-citation="entities:11021:1" rel="noopener">Toa Oil Co Ltd (5008 JP)</a>.Yesterday, the Tender Offer closed without fanfare. Today Idemitsu announced the results (<a href="https://ssl4.eir-parts.net/doc/5019/ir_material9/154414/00.pdf" target="_blank" rel="noopener">English</a>, <a href="https://www.idss.co.jp/content/100034505.pdf" target="_blank" rel="noopener">Japanese</a>). Because Idemitsu already owned 50+% it only needed 2,058,875 shares which was 16+% or roughly a third of the minority to get to 66.7% to squeeze out remaining minority shareholders. Idemitsu got 470,668 shares, or 3.82%. In my first insight <a href="https://www.smartkarma.com/insights/idemitsu-launches-lowball-tender-offer-for-subsidiary-toa-oil-5008" target="_blank" data-smartkarma-citation="insights:46384" rel="noopener">Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008)</a>, I showed what I thought the shareholder structure breakdown for support looked like. In that table, I suggested at a minimum, it was likely to get support from financial and corporate crossholders 483,000 shares) and from directors (13,500 shares). They did not even get that much. Cornwall Capital, which had climbed from 18+% to 26.5+% during the course of the Tender Offer obviously did not tender, but neither did 99% of the other non-crossholder-held shares. This was an enormous failure for Idemitsu. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/093/original/Screenshot+2021-02-16+at+8.26.07+PM.png?1613478380" class="editor-image img-responsive" data-smartkarma-image-id="189093"></figure></section>What next? Read on.

True to the sentiment expressed by the Idemitsu Kosan (5019 JP) Finance Dept chief who spoke at the earnings news conference last week, Idemitsu Kosan did not change the price on its ¥2450/share Tender Offer for Toa Oil Co Ltd (5008 JP).Yesterday, the Tender Offer closed without fanfare. Today Idemitsu announced the results (English, Japanese). Because Idemitsu already owned 50+% it only needed 2,058,875 shares which was 16+% or roughly a third of the minority to get to 66.7% to squeeze out remaining minority shareholders. Idemitsu got 470,668 shares, or 3.82%. In my first insight Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008), I showed what I thought the shareholder structure breakdown for support looked like. In that table, I suggested at a minimum, it was likely to get support from financial and corporate crossholders 483,000 shares) and from directors (13,500 shares). They did not even get that much. Cornwall Capital, which had climbed from 18+% to 26.5+% during the course of the Tender Offer obviously did not tender, but neither did 99% of the other non-crossholder-held shares. This was an enormous failure for Idemitsu. What next? Read on.

Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores

At the end of January 2021 when <a href="https://www.smartkarma.com/entities/toa-oil-co-ltd" target="_blank" data-smartkarma-citation="entities:11021:1" rel="noopener">Toa Oil Co Ltd (5008 JP)</a> announced its Q3 results and very big full-year forecast revision (discussed in <a href="https://www.smartkarma.com/insights/toa-oil-5008-tender-offer-updated-update-still-looks-bumpity" target="_blank" data-smartkarma-citation="insights:47625" rel="noopener">Toa Oil (5008) Tender Offer Updated Update - STILL Looks Bumpity</a>), the share price of Toa Oil was trading at ¥2800 which was just off a two-plus year high, and lead shareholder Cornwall Capital had reported upping their stake to 22.98% the day before. The change in annual forecast required a change in the Opinion Statement of the Target Company and that required a change in the Tender Offer Registration statement by Idemitsu, which required them to extend the Tender Offer Closing Date by 8 days to 15 February. In my last piece, I mooted the possibility that Idemitsu could announce a change in price at the time of its earnings on 9 February. It did not. I also put forth the problem of The Dog Catching The Car. If the dog chases the car, it's all fun. If the car stops and the driver gets out, the dog has to figure out what to do.Thinking Dogs can read on.

At the end of January 2021 when Toa Oil Co Ltd (5008 JP) announced its Q3 results and very big full-year forecast revision (discussed in Toa Oil (5008) Tender Offer Updated Update - STILL Looks Bumpity), the share price of Toa Oil was trading at ¥2800 which was just off a two-plus year high, and lead shareholder Cornwall Capital had reported upping their stake to 22.98% the day before. The change in annual forecast required a change in the Opinion Statement of the Target Company and that required a change in the Tender Offer Registration statement by Idemitsu, which required them to extend the Tender Offer Closing Date by 8 days to 15 February. In my last piece, I mooted the possibility that Idemitsu could announce a change in price at the time of its earnings on 9 February. It did not. I also put forth the problem of The Dog Catching The Car. If the dog chases the car, it's all fun. If the car stops and the driver gets out, the dog has to figure out what to do.Thinking Dogs can read on.

Toa Oil (5008) Tender - Has the Dog Caught the Car?

David Blennerhassett

<div>
Last Week in Event SPACE ...
</div>
<div>
<ul>
<li>Reportedly <a href="https://www.smartkarma.com/entities/faw-car-company-limited-a" target="_blank" data-smartkarma-citation="entities:6497:1" rel="noopener">Faw Car Company Limited A (000800 CH)</a> is allegedly jostling to take a turn at the wheel of <a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China Automotive (1114 HK)</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP)</a> is now an overpriced stock with a supply overhang. The hope of a <a href="https://www.smartkarma.com/entities/nabtesco-corp" target="_blank" data-smartkarma-citation="entities:13176:1" rel="noopener">Nabtesco Corp (6268 JP)</a> event is now gone.</li>
<li>Whoever takes control of <a href="https://www.smartkarma.com/entities/sawada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7311:1" rel="noopener">Sawada Holdings (8699 JP)</a> is going to see the bulk of its major asset liquidated. Buy this stock with both hands at ¥760/share.</li>
<li>
Murakami-affiliated bidder City Index Eleventh has launched an overbid for <a href="https://www.smartkarma.com/entities/japan-asia-group-ltd" target="_blank" data-smartkarma-citation="entities:12428:1" rel="noopener">Japan Asia (3751 JP)</a> at ¥1,210/share. The explanation is an eye-opener, and the strategy is very well done.
</li>
<li>Ahead of the three-year anniversary lock-up expiring next month, enabling <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>/<a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> to sell more shares of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>,  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. </li>
</ul>
</div>
<div>
<ul>
<li>Plus, other events, CCASS movements and Mood Spins.</li>
</ul>
</div>
(This insight covers specific insights &amp; comments involving Stubs, Pairs, Arbitrage, share Classifications, and Events - or SPACE - in the past week)


Last Week in Event SPACE ...



Reportedly Faw Car Company Limited A (000800 CH) is allegedly jostling to take a turn at the wheel of Brilliance China Automotive (1114 HK).

Harmonic Drive Systems (6324 JP) is now an overpriced stock with a supply overhang. The hope of a Nabtesco Corp (6268 JP) event is now gone.
Whoever takes control of Sawada Holdings (8699 JP) is going to see the bulk of its major asset liquidated. Buy this stock with both hands at ¥760/share.

Murakami-affiliated bidder City Index Eleventh has launched an overbid for Japan Asia (3751 JP) at ¥1,210/share. The explanation is an eye-opener, and the strategy is very well done.

Ahead of the three-year anniversary lock-up expiring next month, enabling Prosus (PRX NA)/Naspers (NPN SJ) to sell more shares of Tencent Holdings (700 HK),  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. 




Plus, other events, CCASS movements and Mood Spins.


(This insight covers specific insights &amp; comments involving Stubs, Pairs, Arbitrage, share Classifications, and Events - or SPACE - in the past week)

Last Week in Event SPACE: Brilliance China, Harmonic Drive, Sawada, Japan Asia, Naspers/Tencent

<h3>The Idemitsu bid for Toa Oil looks bumpity. It is a weird situation though.</h3>In mid-December, <a href="https://www.smartkarma.com/entities/idemitsu-kosan-co-ltd" target="_blank" data-smartkarma-citation="entities:109:1" rel="noopener">Idemitsu Kosan (5019 JP)</a> - one of the two large refinery groups in Japan, formed from the merger of Idemitsu Kosan and Showa Shell Oil KK (the other large one being <a href="https://www.smartkarma.com/entities/eneos-holdings-inc" target="_blank" data-smartkarma-citation="entities:638:1" rel="noopener">ENEOS Holdings (5020 JP)</a> formed from JX and Tonen General) - announced a Tender Offer for the minority portion of <a href="https://www.smartkarma.com/entities/toa-oil-co-ltd" target="_blank" data-smartkarma-citation="entities:11021:1" rel="noopener">Toa Oil Co Ltd (5008 JP)</a>.Idemitsu had "inherited" the majority portion in the acquisition of Showa Shell a couple years ago, and had not wrapped it up yet. Toa Oil has for years been considered a jewel of an asset because of its extraordinarily high Nelson Complexity Index among refineries in Japan. This allows the company to get more, and more interesting products, out of every barrel of oil put in, and it allows the use of very heavy oil which is less expensive. Because the company gets 90% of its revenue acting as an outsourced refinery for Idemitsu's raw materials and output, it carries little inventory and earns a tolling spread, which normally would be negotiated on an arms' length basis. Given the replacement value of the asset, and the market value of the use of the asset, it would appear that the current agreement with the current level of income it affords Toa is not quite arms' length. That would be a good reason to object to the pricing of the deal. If the refinery asset were sold on the open market in an auction, it would likely fetch a higher price for shareholders, including Idemitsu. The original deal and all its parameters was discussed in <a href="https://www.smartkarma.com/insights/idemitsu-launches-lowball-tender-offer-for-subsidiary-toa-oil-5008" target="_blank" data-smartkarma-citation="insights:46384" rel="noopener">Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008)</a> and was updated in <a href="https://www.smartkarma.com/insights/toa-oil-5008-tender-offer-update-looks-bumpity" target="_blank" data-smartkarma-citation="insights:46996" rel="noopener">Toa Oil (5008) Tender Offer Update - Looks Bumpity.</a> <h2>The NEW News</h2><ul>
<li>On 20 January, Toa Oil announced the record date for the EGM to be 10 February.</li>
<li>Since I last wrote, the largest shareholder has gotten larger, adding 2% to its position as of 21 January (and reported 28 January) and they now hold 22.98%. </li>
<li>On Friday 29 January, Toa Oil reported its <a href="https://www.toaoil.co.jp/investor/pdf/settlement_report_202103_3.pdf" target="_blank" rel="noopener">Q3 earnings</a>.</li>
<li>Toa Oil also announced a revision to its <a href="https://www.toaoil.co.jp/investor/pdf/20210129_gyousekiyosou_shusei.pdf" target="_blank" rel="noopener">full-year forecasts</a>.  The revenue forecast was revised by +7.7%. OP was revised by +509.8%. Net Profit was revised by +418.9%. Those are very big numbers. </li>
<li>Based on that revision, Toa Oil had to revise its <a href="https://www.toaoil.co.jp/investor/pdf/20210129_ikenhyoumei_henkou_english.pdf" target="_blank" rel="noopener">Target Opinion Statement</a>.</li>
<li>And because Toa Oil revised its Target Opinion Statement, pursuant to Article 27-8 Para 8 of the Financial Instruments and Exchange Act, Idemitsu had to <a href="https://ssl4.eir-parts.net/doc/5019/ir_material9/153752/00.pdf" target="_blank" rel="noopener">extend the Tender Offer</a> so there were 10 business days between the announcement and the tender close. The old close was 2 February. The new close is 15 February. </li>
<li>I expect that means Toa Oil will amend the record date for the EGM because Toa and Idemitsu would not want the EGM record date to be before Idemitsu had secured the extra shares.</li>
</ul>The quantum of the net change in the revision in earnings forecast should merit a little complaint by shareholders. The change in net income this year alone vs forecast is 5.1% of the Tender Offer Price Market Cap. Even if there is no change to future earnings EVER, that is 5.1% more. Given that the Tender Offer Price was the wrong price in the first place, I imagine shareholders who have seen the price trade above the Tender Offer Price every day since the shares were free to trade (on the first day after the announcement, the shares closed limit up but below the tender offer price), will be even less inclined to accept a low-ball price. More discussion below.

The Idemitsu bid for Toa Oil looks bumpity. It is a weird situation though.In mid-December, Idemitsu Kosan (5019 JP) - one of the two large refinery groups in Japan, formed from the merger of Idemitsu Kosan and Showa Shell Oil KK (the other large one being ENEOS Holdings (5020 JP) formed from JX and Tonen General) - announced a Tender Offer for the minority portion of Toa Oil Co Ltd (5008 JP).Idemitsu had "inherited" the majority portion in the acquisition of Showa Shell a couple years ago, and had not wrapped it up yet. Toa Oil has for years been considered a jewel of an asset because of its extraordinarily high Nelson Complexity Index among refineries in Japan. This allows the company to get more, and more interesting products, out of every barrel of oil put in, and it allows the use of very heavy oil which is less expensive. Because the company gets 90% of its revenue acting as an outsourced refinery for Idemitsu's raw materials and output, it carries little inventory and earns a tolling spread, which normally would be negotiated on an arms' length basis. Given the replacement value of the asset, and the market value of the use of the asset, it would appear that the current agreement with the current level of income it affords Toa is not quite arms' length. That would be a good reason to object to the pricing of the deal. If the refinery asset were sold on the open market in an auction, it would likely fetch a higher price for shareholders, including Idemitsu. The original deal and all its parameters was discussed in Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008) and was updated in Toa Oil (5008) Tender Offer Update - Looks Bumpity. The NEW News
On 20 January, Toa Oil announced the record date for the EGM to be 10 February.
Since I last wrote, the largest shareholder has gotten larger, adding 2% to its position as of 21 January (and reported 28 January) and they now hold 22.98%. 
On Friday 29 January, Toa Oil reported its Q3 earnings.
Toa Oil also announced a revision to its full-year forecasts.  The revenue forecast was revised by +7.7%. OP was revised by +509.8%. Net Profit was revised by +418.9%. Those are very big numbers. 
Based on that revision, Toa Oil had to revise its Target Opinion Statement.
And because Toa Oil revised its Target Opinion Statement, pursuant to Article 27-8 Para 8 of the Financial Instruments and Exchange Act, Idemitsu had to extend the Tender Offer so there were 10 business days between the announcement and the tender close. The old close was 2 February. The new close is 15 February. 
I expect that means Toa Oil will amend the record date for the EGM because Toa and Idemitsu would not want the EGM record date to be before Idemitsu had secured the extra shares.
The quantum of the net change in the revision in earnings forecast should merit a little complaint by shareholders. The change in net income this year alone vs forecast is 5.1% of the Tender Offer Price Market Cap. Even if there is no change to future earnings EVER, that is 5.1% more. Given that the Tender Offer Price was the wrong price in the first place, I imagine shareholders who have seen the price trade above the Tender Offer Price every day since the shares were free to trade (on the first day after the announcement, the shares closed limit up but below the tender offer price), will be even less inclined to accept a low-ball price. More discussion below.

Toa Oil (5008) Tender Offer Updated Update - STILL Looks Bumpity

Japan

ENEOS Holdings, Inc. operates refining and marketing businesses. The Company refines and distributes petroleum and petroleum chemical products. ENEOS Holdings also provides non ferrous metals, electronic materials, and other products.

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ENEOS Holdings (5020 JP)

Toa Oil (5008) - Idemitsu Looking To The Next Attempt?

The Idemitsu TOB for Toa failed but Idemitsu still wants it. The question is when and how. Cornwall is now above 30% and the market can clearly...

Travis Lundy

Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores

The Idemitsu Tender Offer for Toa failed. Independent shareholders stayed away in droves. Next, Idemitsu may be inclined to try something less...

Travis Lundy

Toa Oil (5008) Tender - Has the Dog Caught the Car?

Idemitsu has big restructuring goals, and Toa Oil plays a part, but is faced with a big bump to get their Toa deal done. If The Dog Catches The...

Travis Lundy

Last Week in Event SPACE: Brilliance China, Harmonic Drive, Sawada, Japan Asia, Naspers/Tencent

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

Toa Oil (5008) Tender Offer Updated Update - STILL Looks Bumpity

Toa Oil reported Q3 results, and a HUGE jump in FY forecasts. OP+500%. Net Profit +400%. Oil demand is better, and the recent spike in electricity...

Travis Lundy

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