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.

Event-Driven

<ul>
<li>In response to the potential Bain competing offer for <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, KKR has waived the precondition and launched its offer at unchanged JPY8,800 per share.</li>
<li>Bain’s due diligence ends on 20 September, and it aims to submit a binding proposal in October. This timeline will thwart KKR’s offer, which closes on 21 October.</li>
<li>KKR’s offer launch at unchanged terms is delaying the inevitable and will have to bump to succeed. A potential bidding war is likely to push the offer price to JPY10,500. </li>
</ul>


In response to the potential Bain competing offer for Fuji Soft Inc (9749 JP), KKR has waived the precondition and launched its offer at unchanged JPY8,800 per share.
Bain’s due diligence ends on 20 September, and it aims to submit a binding proposal in October. This timeline will thwart KKR’s offer, which closes on 21 October.
KKR’s offer launch at unchanged terms is delaying the inevitable and will have to bump to succeed. A potential bidding war is likely to push the offer price to JPY10,500. 


Fuji Soft (9749 JP): KKR's Cop-Out as It Launches at Unchanged Terms, Next Move Bain

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The original Target Opinion Statement for KKR's bid at ¥8,800/share offered a glimpse at a non-binding, questionably feasible offer at a slightly higher price, which 3DIP might have rejected.</li>
<li>That was apparently Bain, and now we know Bain has consistently had the higher price. <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> handled this whole process badly, perhaps cowed by 3DIP.</li>
<li>Now the cat is amongst the pigeons. This is less hostile than it looks IMO. The market thinks it will be a bun fight. </li>
</ul>


The original Target Opinion Statement for KKR's bid at ¥8,800/share offered a glimpse at a non-binding, questionably feasible offer at a slightly higher price, which 3DIP might have rejected.
That was apparently Bain, and now we know Bain has consistently had the higher price. Fuji Soft Inc (9749 JP) handled this whole process badly, perhaps cowed by 3DIP.
Now the cat is amongst the pigeons. This is less hostile than it looks IMO. The market thinks it will be a bun fight. 


Fuji Soft (9749 JP) - Bain Bids More, The Market Goes Even Higher

<ul>
<li>Nikkei reports that Bain will launch a competing tender offer for <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> around JPY9,200-9,300 per share, around 5% higher than KKR's offer. </li>
<li>The Board responded that Bain submitted a non-binding proposal on 26 July. The special committee will consider its feasibility if a binding proposal is submitted. </li>
<li>KKR has three options to respond to a higher Bain offer: revise it, launch a hostile offer at unchanged terms, or walk away. The first option is the most likely.</li>
</ul>


Nikkei reports that Bain will launch a competing tender offer for Fuji Soft Inc (9749 JP) around JPY9,200-9,300 per share, around 5% higher than KKR's offer. 
The Board responded that Bain submitted a non-binding proposal on 26 July. The special committee will consider its feasibility if a binding proposal is submitted. 
KKR has three options to respond to a higher Bain offer: revise it, launch a hostile offer at unchanged terms, or walk away. The first option is the most likely.


Fuji Soft (9749 JP): Bain’s Rumoured Counteroffer

<ul>
<li>KKR has announced its previously leaked takeover of <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>. Two activists with 30+% between them have agreed to tender at ¥8,800.  </li>
<li>Given what the founder, crossholders, and other arbs own, this gets done easily. Congrats on the win to the activists. </li>
<li>We will see more activism and more pressure on under-earning companies to go private to clean themselves up outside the public eye. Big opportunities for years.</li>
</ul>


KKR has announced its previously leaked takeover of Fuji Soft Inc (9749 JP). Two activists with 30+% between them have agreed to tender at ¥8,800.  
Given what the founder, crossholders, and other arbs own, this gets done easily. Congrats on the win to the activists. 
We will see more activism and more pressure on under-earning companies to go private to clean themselves up outside the public eye. Big opportunities for years.


KKR ¥8,800 Takeover of Fuji Soft (9749) - Details and Arb Grid

Canvest Environmental Protection Group / Event-Driven

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/yichang-hec-changjiang-pharmaceutical" target="_blank" data-smartkarma-citation="entities:21040:1" rel="noopener">Yichang HEC Changjiang Pharma (1558 HK)</a>, <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>, <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a>, <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>. </li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/tohokushinsha-film-corp" target="_blank" data-smartkarma-citation="entities:15129:1" rel="noopener">Tohokushinsha Film (2329 JP)</a>, <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1" rel="noopener">Descente Ltd (8114 JP)</a>, <a href="https://www.smartkarma.com/entities/second-chance-properties-ltd" target="_blank" data-smartkarma-citation="entities:20342:1" rel="noopener">Second Chance Properties (SCE SP)</a>, <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl Corp (4921 JP)</a>, <a href="https://www.smartkarma.com/entities/alps-logistics-co-ltd" target="_blank" data-smartkarma-citation="entities:3935:1" rel="noopener">Alps Logistics (9055 JP)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Canvest Environmental Protection Group (1381 HK), China Traditional Chinese Medicine (570 HK), Greatview Aseptic Packaging (468 HK), Shanghai Henlius Biotech (2696 HK). 
Lowest spreads: Tohokushinsha Film (2329 JP), Fuji Soft Inc (9749 JP), Descente Ltd (8114 JP), Second Chance Properties (SCE SP), Fancl Corp (4921 JP), Alps Logistics (9055 JP). 


Merger Arb Mondays (02 Sep) - Canvest, China TCM, GA Pack, CPMC, Shinko, Arvida, SilverLake

Japan

FUJI SOFT INCORPORATED is an independent software developer, specializing in communications and machine control software, business application software for bank and insurance companies, and operating system software.  Fuji Soft also installs, manages, and maintains computer systems.  The Company develops and sells word processing packaged software and also provides internet service.

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Fuji Soft Inc (9749 JP)

Fuji Soft (9749 JP): KKR's Cop-Out as It Launches at Unchanged Terms, Next Move Bain

KKR’s offer launch at unchanged terms is delaying the inevitable. It will have to be bumped to succeed. A potential bidding war could push the...

Arun George

Fuji Soft (9749 JP) - Bain Bids More, The Market Goes Even Higher

Bain was apparently the "Third Party" referred to in the KKR Deal Target Opinion Statement. Bain has clarified what went wrong (Fuji Soft's process...

Travis Lundy

Fuji Soft (9749 JP): Bain’s Rumoured Counteroffer

Bain is rumoured to launch a counteroffer. KKR has three options to respond to a higher Bain offer: revise it, launch a hostile offer at unchanged...

Arun George

KKR ¥8,800 Takeover of Fuji Soft (9749) - Details and Arb Grid

Nikkei article says Bain Capital approached FujiSoft (9749) with an "About ¥600bn" offer to overbid KKR (¥554bn). KKR/Fujisoft talked with 3D for...

Travis Lundy

Merger Arb Mondays (02 Sep) - Canvest, China TCM, GA Pack, CPMC, Shinko, Arvida, SilverLake

This week, the highest gross spreads are HEC Pharma (109.7%), Canvest (13.7%), China TCM (8.5%), Malaysia Airports (7.8%), GA Pack (7.3%), Henlius...

Arun George

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