Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In 2019, it became apparent <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a> wanted to sell down its stakes in non-core businesses (Shinko Electric, Fujitsu General, and FDK), and move on to better things.</li>
<li>In early January 2023, a Bloomberg article suggested a sale process. A 20 Jan 2023 article suggested Fujitsu General's auction was imminent. I wrote a <a href="https://www.smartkarma.com/insights/fujitsu-general-6755-fujitsu-s-stake-on-the-block" target="_blank" rel="noopener">piece</a>. It was not bullish.</li>
<li>The stock rose a bit, then fell 40+% through last week. Now another article suggests some urgency at Fujitsu. That changes things.</li>
</ul>


In 2019, it became apparent Fujitsu Ltd (6702 JP) wanted to sell down its stakes in non-core businesses (Shinko Electric, Fujitsu General, and FDK), and move on to better things.
In early January 2023, a Bloomberg article suggested a sale process. A 20 Jan 2023 article suggested Fujitsu General's auction was imminent. I wrote a piece. It was not bullish.
The stock rose a bit, then fell 40+% through last week. Now another article suggests some urgency at Fujitsu. That changes things.


Fujitsu General (6755) - Fujitsu Wants Out, May Force the Issue

David Blennerhassett

<ul>
<li>The BIG Risk is that <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a> sells its stake in <a href="https://www.smartkarma.com/entities/fujitsu-general-ltd" target="_blank" data-smartkarma-citation="entities:2025:1" rel="noopener">Fujitsu General (6755 JP)</a> to someone in a below-market tender offer.</li>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (A) (19 HK)</a> may still see more outperformance from its  latest buyback. But it's up ~29% since the company announced it was buying both the As and Bs. </li>
<li>
<a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>'s shares continue to edge up after its founder recently increased its stake. </li>
</ul>


The BIG Risk is that Fujitsu Ltd (6702 JP) sells its stake in Fujitsu General (6755 JP) to someone in a below-market tender offer.

Swire Pacific (A) (19 HK) may still see more outperformance from its  latest buyback. But it's up ~29% since the company announced it was buying both the As and Bs. 

Li Ning (2331 HK)'s shares continue to edge up after its founder recently increased its stake. 


Last Week in Event SPACE: Fujitsu General, Swire Pacific, Li Ning, IJJT

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.

Shinko Electric Industries / Event-Driven

<ul>
<li>After months of speculation, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a> has recommended the JIC alliance’s preconditional tender offer of JPY5,920 per share, an 18.9% premium to the undisturbed price (31 May). </li>
<li>The pre-condition relates to regulatory approvals in Japan, China, Korea, and possibly Vietnam. The offeror may waive the pre-condition. The offer is long-dated and expected to start in August 2024.</li>
<li>The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low 7.1% premium to the last close, the offer resulted from a competing bidding process. </li>
</ul>


After months of speculation, Shinko Electric Industries (6967 JP) has recommended the JIC alliance’s preconditional tender offer of JPY5,920 per share, an 18.9% premium to the undisturbed price (31 May). 
The pre-condition relates to regulatory approvals in Japan, China, Korea, and possibly Vietnam. The offeror may waive the pre-condition. The offer is long-dated and expected to start in August 2024.
The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low 7.1% premium to the last close, the offer resulted from a competing bidding process. 


Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920

<ul>
<li>
<a href="https://www.reuters.com/markets/deals/mitsubishi-corp-considering-bid-fujitsus-chip-unit-shinko-electric-sources-2023-10-17/" target="_blank" rel="noopener">Reuters reported</a> that <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)</a> is considering a joint bid for <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a>’s 50% stake in <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>. </li>
<li>Fujitsu first flagged a potential stake sale in its 1HFY22 results last October. Previously rumoured suitors include Apollo Global Management, Bain Capital, Dai Nippon Printing, JIC and KKR.</li>
<li>Shinko’s shares are up 73% YTD, which is not excessive compared to <a href="https://www.smartkarma.com/entities/ibiden-co-ltd" target="_blank" data-smartkarma-citation="entities:16630:1" rel="noopener">Ibiden Co Ltd (4062 JP)</a> (up 63.2% YTD). The valuation is undemanding, which facilitates a potential offer.</li>
</ul>



Reuters reported that Mitsubishi Corp (8058 JP) is considering a joint bid for Fujitsu Ltd (6702 JP)’s 50% stake in Shinko Electric Industries (6967 JP). 
Fujitsu first flagged a potential stake sale in its 1HFY22 results last October. Previously rumoured suitors include Apollo Global Management, Bain Capital, Dai Nippon Printing, JIC and KKR.
Shinko’s shares are up 73% YTD, which is not excessive compared to Ibiden Co Ltd (4062 JP) (up 63.2% YTD). The valuation is undemanding, which facilitates a potential offer.


Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake

<ul>
<li>Yesterday about 5 minutes before the close, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a> went into kehai, rising 8.6%, then falling back to end + 3% on the day. </li>
<li>This morning, the stock opened down 2%, rose 4%, fell 4%, then rose 4%. All in the first 45 minutes. Then it fell back 4% and ended down 2% today.</li>
<li>The proximate cause of all of this was a <a href="https://www.reuters.com/markets/deals/mitsubishi-corp-considering-bid-fujitsus-chip-unit-shinko-electric-sources-2023-10-17/" target="_blank" rel="noopener">Reuters article</a> out 5mins before the close yesterday suggesting <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)</a> is considering bidding for Shinko Electric.</li>
</ul>


Yesterday about 5 minutes before the close, Shinko Electric Industries (6967 JP) went into kehai, rising 8.6%, then falling back to end + 3% on the day. 
This morning, the stock opened down 2%, rose 4%, fell 4%, then rose 4%. All in the first 45 minutes. Then it fell back 4% and ended down 2% today.
The proximate cause of all of this was a Reuters article out 5mins before the close yesterday suggesting Mitsubishi Corp (8058 JP) is considering bidding for Shinko Electric.


Shinko Electric (6967) Update - MitCorp In The Mix?

Japan

Fujitsu Ltd manufactures semiconductor, computer, and communication equipment. The Company provides comprehensive information technology, network and telecommunication solutions, and Internet services.

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Fujitsu Ltd (6702 JP)

Fujitsu General (6755) - Fujitsu Wants Out, May Force the Issue

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Travis Lundy

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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

Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920

The offer is long-dated. The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low premium to the last close, the...

Arun George

Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake

Mitsubishi Corp is the latest rumoured suitor. Shinko’s shares are up 73% YTD, which is not excessive compared to Ibiden (63.2% YTD). The valuation...

Arun George

Shinko Electric (6967) Update - MitCorp In The Mix?

Shinko Electric Industries' stock experienced significant fluctuations after reports emerged that Mitsubishi Corp is considering a bid for the...

Travis Lundy

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Fujitsu General (6755) - Fujitsu Wants Out, May Force the Issue

Fujitsu (6702), the parent, has had negative press (UK Post Office) recently but this is unrelated to Fujitsu General. FGEL announced last week it...

Travis Lundy

Last Week in Event SPACE: Fujitsu General, Swire Pacific, Li Ning, IJJT

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

Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920

The offer is long-dated. The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low premium to the last close, the...

Arun George

Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake

Mitsubishi Corp is the latest rumoured suitor. Shinko’s shares are up 73% YTD, which is not excessive compared to Ibiden (63.2% YTD). The valuation...

Arun George

Shinko Electric (6967) Update - MitCorp In The Mix?

​Shinko Electric Industries' stock experienced significant fluctuations after reports emerged that Mitsubishi Corp is considering a bid for the...

Travis Lundy

Shinko Electric Industries' stock experienced significant fluctuations after reports emerged that Mitsubishi Corp is considering a bid for the...