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>The battle for <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" rel="noopener">Fuji Soft Inc. (9749 JP)</a> took an unexpected turn. Bain <a href="https://www.baincapital.co.jp/sites/default/files/2024-12/BCP_9749_11122024-jp1.pdf" target="_blank" rel="noopener">revised its offer</a> to JPY9,600, a 1.6% premium to KKR’s JPY9,451 second tender offer. </li>
<li>Bain has introduced a minimum number of shares to be purchased criterion. Bain’s offer is structured to address most but not all of the special committee’s reasons for opposition.</li>
<li>The Board’s first reaction will be to ask KKR, its preferred bidder, to bump. Given the amount of time and effort KKR has put into this bid, it will bump. </li>
</ul>


The battle for Fuji Soft Inc. (9749 JP) took an unexpected turn. Bain revised its offer to JPY9,600, a 1.6% premium to KKR’s JPY9,451 second tender offer. 
Bain has introduced a minimum number of shares to be purchased criterion. Bain’s offer is structured to address most but not all of the special committee’s reasons for opposition.
The Board’s first reaction will be to ask KKR, its preferred bidder, to bump. Given the amount of time and effort KKR has put into this bid, it will bump. 


Fuji Soft (9749 JP): Bain Can’t Take No for an Answer and Returns with a JPY9,600 Offer

<ul>
<li>SilverCape has launched a hostile preconditional tender offer for <a href="https://www.smartkarma.com/entities/digital-holdings-inc" target="_blank" data-smartkarma-citation="entities:1697:1" rel="noopener">Digital Holdings Inc (2389 JP)</a> at JPY2,380, a 20.8% premium to the <a href="https://www.smartkarma.com/entities/hakuhodo-dy-holdings-inc" target="_blank" data-smartkarma-citation="entities:8736:1" rel="noopener">Hakuhodo Dy Holdings (2433 JP)</a> JPY1,970 offer. </li>
<li>The Board stonewalled SilverCape’s attempts to negotiate a friendly offer. SilverCape’s offer is based on EV/EBITDA multiples and will commence in late November.</li>
<li>The situation shares similarities with Soft99's contested offer. The Board is likely to oppose the SilverCape offer. Hakuhodo’s likely move will be to extend the close and disclose current acceptances. </li>
</ul>


SilverCape has launched a hostile preconditional tender offer for Digital Holdings Inc (2389 JP) at JPY2,380, a 20.8% premium to the Hakuhodo Dy Holdings (2433 JP) JPY1,970 offer. 
The Board stonewalled SilverCape’s attempts to negotiate a friendly offer. SilverCape’s offer is based on EV/EBITDA multiples and will commence in late November.
The situation shares similarities with Soft99's contested offer. The Board is likely to oppose the SilverCape offer. Hakuhodo’s likely move will be to extend the close and disclose current acceptances. 


Digital Holdings (2389 JP): SilverCape Counters with a Hostile Preconditional Offer

<ul>
<li>On 12 September, <a href="https://www.47news.jp/13147153.html" target="_blank" rel="noopener">Kyodo News</a> reported that Effissimo Capital Management will launch a competing tender offer for <a href="https://www.smartkarma.com/entities/soft99-corp" target="_blank" data-smartkarma-citation="entities:18486:1" rel="noopener">Soft99 Corp (4464 JP)</a> at JPY4,100, 66.3% higher than the JPY2,465 MBO offer.</li>
<li>The Effissimo offer structure has been designed to shine an unflattering spotlight on the MBO low-ball offer and to prevent management from privatising Soft99.  </li>
<li>The management has several options to respond. The initial play will likely be to lean on the special committee to question the feasibility of the Effissimo bid. </li>
</ul>


On 12 September, Kyodo News reported that Effissimo Capital Management will launch a competing tender offer for Soft99 Corp (4464 JP) at JPY4,100, 66.3% higher than the JPY2,465 MBO offer.
The Effissimo offer structure has been designed to shine an unflattering spotlight on the MBO low-ball offer and to prevent management from privatising Soft99.  
The management has several options to respond. The initial play will likely be to lean on the special committee to question the feasibility of the Effissimo bid. 


Soft99 Corp (4464 JP): Shock and Awe as Effissimo Emerges with a Competing Offer

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On 30 July, <a href="https://www.smartkarma.com/entities/fujitec-co-ltd" target="_blank" data-smartkarma-citation="entities:11686:1" rel="noopener">Fujitec Co Ltd (6406 JP)</a> and Swedish PE Firm EQT announced a deal to acquire the company with the Uchiyama family. Two activists signed tender agreements. </li>
<li>The deal is not expensive IF you underwrite strong profitability growth and assume the large net receivables position can be better addressed.</li>
<li>But the stock is trading tight to terms and there are 6+ months until you get your money. </li>
</ul>


On 30 July, Fujitec Co Ltd (6406 JP) and Swedish PE Firm EQT announced a deal to acquire the company with the Uchiyama family. Two activists signed tender agreements. 
The deal is not expensive IF you underwrite strong profitability growth and assume the large net receivables position can be better addressed.
But the stock is trading tight to terms and there are 6+ months until you get your money. 


[Japan M&A] Fujitec (6406) PE Bid Not Super High But May Be Tough To Beat

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hogy-medical-co-ltd" target="_blank" data-smartkarma-citation="entities:10493:1" rel="noopener">Hogy Medical (3593 JP)</a>'s founder passed and there was a re-arranging of Hoki family deckchairs in 2021. In 2022 there was a BIG buyback from the family at ¥3,130/share.</li>
<li>I discussed it <a href="https://www.smartkarma.com/insights/huge-hogy-medical-3593-buyback-from-the-founding-family" target="_blank" rel="noopener">here</a>. I suggested that meant accretion, a family willing to sell, and an open register for a cheap company always heavily owned by value investors.</li>
<li>The stock went nowhere for 18mos as activists dallied. In 2024 it ran from ¥3,500 to ¥5,000 as Dalton bought 20%. Then they got a board seat. Now takeover noise.</li>
</ul>



Hogy Medical (3593 JP)'s founder passed and there was a re-arranging of Hoki family deckchairs in 2021. In 2022 there was a BIG buyback from the family at ¥3,130/share.
I discussed it here. I suggested that meant accretion, a family willing to sell, and an open register for a cheap company always heavily owned by value investors.
The stock went nowhere for 18mos as activists dallied. In 2024 it ran from ¥3,500 to ¥5,000 as Dalton bought 20%. Then they got a board seat. Now takeover noise.


[Japan Activism/M&A] Hogy Medical (3593) Reportedly Up For Auction - Totally Unsurprising

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): Bain Can’t Take No for an Answer and Returns with a JPY9,600 Offer

Despite repeated stonewalling, Bain returns with a revised offer. The Board’s first reaction will be to ask KKR, its preferred bidder, to bump. KKR...

Arun George

Digital Holdings (2389 JP): SilverCape Counters with a Hostile Preconditional Offer

The situation shares similarities with Soft99 tender. The Board is likely to oppose the SilverCape offer. Hakuhodo’s likely move will be to extend...

Arun George

Soft99 Corp (4464 JP): Shock and Awe as Effissimo Emerges with a Competing Offer

Kyodo reports that Effissimo will launch a competing offer at JPY4,100, which will shine an unflattering spotlight on the MBO low-ball offer and...

Arun George

[Japan M&A] Fujitec (6406) PE Bid Not Super High But May Be Tough To Beat

The EQT deal for Fujitec is expensive against this year's earnings and cheap against FY+4, IF you underwrite management plans. It's a takeunder...

Travis Lundy

[Japan Activism/M&A] Hogy Medical (3593) Reportedly Up For Auction - Totally Unsurprising

Hogy Medical has been a very slow-grower in a very stable business. It has always attracted value investors. Now it has activists. Reports of a...

Travis Lundy

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