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>
<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> announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.</li>
<li>The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.</li>
<li>Despite the offer resulting from an auction, there remains a medium probability that <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> or a spurned white knight bidder (Candidate A) emerges with a higher offer.</li>
</ul>



Makino Milling Machine Co (6135 JP) announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.
The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.
Despite the offer resulting from an auction, there remains a medium probability that Nidec Corp (6594 JP) or a spurned white knight bidder (Candidate A) emerges with a higher offer.


Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Last night, <a href="https://www.smartkarma.com/entities/topcon-corp" target="_blank" data-smartkarma-citation="entities:738:1" rel="noopener">Topcon Corp (7732 JP)</a> announced that KKR had agreed a deal with ValueAct Capital who owns 14.62% of Topcon to have VAC tender shares and invest in Bidco.</li>
<li>Topcon's Special Committee saw nothing wrong with this in terms of fairness. I think that argument needs to be investigated at a broader level. </li>
<li>If Bidder wants 50.1% control and expects passive to agree, and Bidder gets 50.1% to join Bidco at terms, obviously, majority of minority disappears. This is an unintended loophole. </li>
</ul>


Last night, Topcon Corp (7732 JP) announced that KKR had agreed a deal with ValueAct Capital who owns 14.62% of Topcon to have VAC tender shares and invest in Bidco.
Topcon's Special Committee saw nothing wrong with this in terms of fairness. I think that argument needs to be investigated at a broader level. 
If Bidder wants 50.1% control and expects passive to agree, and Bidder gets 50.1% to join Bidco at terms, obviously, majority of minority disappears. This is an unintended loophole. 


[Japan Activism] - ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer

Index Rebalance

<ul>
<li>This year there are 10 Free Float Weight Changes for April. There are 20 Liquidity Factor Changes, 2 Inclusions, and 3 M&amp;A-related downweights. There are 90+ Share Count Change Downweights.</li>
<li>This is a bigger Big April Basket than normally comes around. And there are some big flows. All trades are 28 April at the close.</li>
<li>Total flow is ~US$2.1bn a side. 64 trades of &gt;2 days of ADV, and of those, 27 with &gt;US$10mm to trade (7 of US$50mm+). Top 20 in USD average 5dADV.</li>
</ul>


This year there are 10 Free Float Weight Changes for April. There are 20 Liquidity Factor Changes, 2 Inclusions, and 3 M&amp;A-related downweights. There are 90+ Share Count Change Downweights.
This is a bigger Big April Basket than normally comes around. And there are some big flows. All trades are 28 April at the close.
Total flow is ~US$2.1bn a side. 64 trades of &gt;2 days of ADV, and of those, 27 with &gt;US$10mm to trade (7 of US$50mm+). Top 20 in USD average 5dADV.


The End-April TOPIX Rebalance - US$2.1bn a Side

<ul>
<li>The difference between an LBO (Leveraged Buy Out) and an MBO (Management Buy Out) is that an MBO is usually just an LBO where the buyers don't replace the CEO.</li>
<li>After 4+mos  of speculation/noise since a Bloomberg article said Topcon was weighing takeover bids, we have a deal. KKR and JIC will buy out Topcon in an "MBO" at ¥3,300/share.</li>
<li>Unusually, the lower limit is 50.1%. This is an OK exit for the "<a href="https://www.smartkarma.com/insights/thinking-about-topcon-7732-and-the-new-meti-enabled-bad-cop-good-cop-routine" target="_blank" rel="noopener">Bad Cops</a>" but not a great one. It should be higher. Start delayed for 4 months.</li>
</ul>


The difference between an LBO (Leveraged Buy Out) and an MBO (Management Buy Out) is that an MBO is usually just an LBO where the buyers don't replace the CEO.
After 4+mos  of speculation/noise since a Bloomberg article said Topcon was weighing takeover bids, we have a deal. KKR and JIC will buy out Topcon in an "MBO" at ¥3,300/share.
Unusually, the lower limit is 50.1%. This is an OK exit for the "Bad Cops" but not a great one. It should be higher. Start delayed for 4 months.


[Japan Activism] - KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share

<ul>
<li>KKR's Second 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> ended 19 February 2025 and KKR got a whopping 57.9% after Bain bowed out. It was close.</li>
<li>The Nozawa founder said it would not tender. Others family members may have, but now KKR has signed a deal with Nozawa family company YK NFC, to support the squeezeout.</li>
<li>Assuming, Nozawa Hiroshi's stake and the NFC stake remain unchanged, that cements the result of the 25 April AGM. But there may be games to play.</li>
</ul>


KKR's Second Tender Offer for Fuji Soft Inc (9749 JP) ended 19 February 2025 and KKR got a whopping 57.9% after Bain bowed out. It was close.
The Nozawa founder said it would not tender. Others family members may have, but now KKR has signed a deal with Nozawa family company YK NFC, to support the squeezeout.
Assuming, Nozawa Hiroshi's stake and the NFC stake remain unchanged, that cements the result of the 25 April AGM. But there may be games to play.


Fuji Soft (9749 JP) - KKR Does Deal With the Family To Squeeze Out Minorities - You Can Join Too

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fuji Soft Inc (9749 JP)

Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

Despite the offer resulting from an auction, there remains a medium probability that Nidec or a spurned white knight bidder (Candidate A) emerges...

Arun George

[Japan Activism] - ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer

Value Act has agreed to tender into the KKR deal for Topcon. That makes this deal highly likely to succeed even if a number of people abstain or...

Travis Lundy

The End-April TOPIX Rebalance - US$2.1bn a Side

There is US$2bn a side to trade on 28 April at the close for a variety of reasons. It is a big month of events with a long list of trades which...

Travis Lundy

Fuji Soft (9749 JP) - KKR Does Deal With the Family To Squeeze Out Minorities - You Can Join Too

Post-close, KKR announced a deal with YK NFC - the Nozawa family company - to vote for the deal. With the options owned, that gets KKR the deal....

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

Despite the offer resulting from an auction, there remains a medium probability that Nidec or a spurned white knight bidder (Candidate A) emerges...

Arun George

[Japan Activism] - ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer

Value Act has agreed to tender into the KKR deal for Topcon. That makes this deal highly likely to succeed even if a number of people abstain or...

Travis Lundy

The End-April TOPIX Rebalance - US$2.1bn a Side

There is US$2bn a side to trade on 28 April at the close for a variety of reasons. It is a big month of events with a long list of trades which...

Travis Lundy

[Japan Activism] - KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share

The Topcon Deal is out. ¥3,300/share. This may or may not please activists. It is light given extreme confidence in the eyecare biz. But if...

Travis Lundy

Fuji Soft (9749 JP) - KKR Does Deal With the Family To Squeeze Out Minorities - You Can Join Too

Post-close, KKR announced a deal with YK NFC - the Nozawa family company - to vote for the deal. With the options owned, that gets KKR the deal....

Travis Lundy