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/rezil-inc" target="_blank" data-smartkarma-citation="entities:45661:1" rel="noopener">Rezil (176A JP)</a> has recommended a tender offer from Bain Capital at JPY2,750, a 57.1% premium to the undisturbed price of JPY1,750.</li>
<li>The offer is attractive as it aligns with the midpoint of the target IFA DCF valuation range, represents an all-time high and is 129.2% above the IPO price of JPY1,200. </li>
<li>This is a done deal as Hikari Tsushin, a cross-holder, tendering is sufficient to meet the minimum tendering condition. At the last close, the gross spread was 6.8%.</li>
</ul>



Rezil (176A JP) has recommended a tender offer from Bain Capital at JPY2,750, a 57.1% premium to the undisturbed price of JPY1,750.
The offer is attractive as it aligns with the midpoint of the target IFA DCF valuation range, represents an all-time high and is 129.2% above the IPO price of JPY1,200. 
This is a done deal as Hikari Tsushin, a cross-holder, tendering is sufficient to meet the minimum tendering condition. At the last close, the gross spread was 6.8%.


Rezil (176A JP): Bain’s Tender Offer Is a Done Deal

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>On 12 May 2025, <a href="https://www.smartkarma.com/entities/sankyo-co-ltd" target="_blank" data-smartkarma-citation="entities:12385:1" rel="noopener">Sankyo Co Ltd (6417 JP)</a> announced earnings (Revenue -3.7%yoy, OP +1.5%, Net Profit +0.4%) with guidance for March 2026 showing Revs, OP, and NP all falling.</li>
<li>OP and NP would fall 14.4% and 18.5% respectively. The dividend is expected to fall ¥10 to ¥90/share which would be a 41.6% payout ratio.</li>
<li>The company also announced a BIG BUYBACK - Up to ¥60bn buying up to 30.0mm shares (13.66%), starting today and going through 31 March 2026.</li>
</ul>


On 12 May 2025, Sankyo Co Ltd (6417 JP) announced earnings (Revenue -3.7%yoy, OP +1.5%, Net Profit +0.4%) with guidance for March 2026 showing Revs, OP, and NP all falling.
OP and NP would fall 14.4% and 18.5% respectively. The dividend is expected to fall ¥10 to ¥90/share which would be a 41.6% payout ratio.
The company also announced a BIG BUYBACK - Up to ¥60bn buying up to 30.0mm shares (13.66%), starting today and going through 31 March 2026.


[Japan Buyback] Sankyo (6417) - Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE

<ul>
<li>The Berkshire Hathaway <a href="https://www.berkshirehathaway.com/2024ar/2024ar.pdf" target="_blank" rel="noopener">Annual Shareholder Letter for 2024</a> was released this weekend. Much was made in Japanese twitter-space of the comments he made on the Japanese trading houses. </li>
<li>He said Berkshire Hathaway's admiration of these companies "has consistently grown" and Berkshire likes their capital deployment, managements, and their attitude in respect to investors. They also pay themselves reasonably.</li>
<li>He mentioned Berkshire will increase their stakes somewhat in the trading houses "over time." That comment deserves some exploration, as does the comment about yen funding.</li>
</ul>


The Berkshire Hathaway Annual Shareholder Letter for 2024 was released this weekend. Much was made in Japanese twitter-space of the comments he made on the Japanese trading houses. 
He said Berkshire Hathaway's admiration of these companies "has consistently grown" and Berkshire likes their capital deployment, managements, and their attitude in respect to investors. They also pay themselves reasonably.
He mentioned Berkshire will increase their stakes somewhat in the trading houses "over time." That comment deserves some exploration, as does the comment about yen funding.


Warren Buffett and the Japanese Trading Houses I

<ul>
<li>WellNeo Sugar (2117) today announced a deal to buy <a href="https://www.smartkarma.com/entities/toyo-sugar-refining-co-ltd" target="_blank" data-smartkarma-citation="entities:2182:1" rel="noopener">Toyo Sugar Refining (2107 JP)</a> at a 27% premium. This is a small ¥11bn deal where insiders own 45%. </li>
<li>Normally I wouldn't even talk about a deal this small but this one has something going for it. Two things actually. </li>
<li>And readers will have to read all the way down to the conclusions to find out the key one, but the setup is that it is too cheap.</li>
</ul>


WellNeo Sugar (2117) today announced a deal to buy Toyo Sugar Refining (2107 JP) at a 27% premium. This is a small ¥11bn deal where insiders own 45%. 
Normally I wouldn't even talk about a deal this small but this one has something going for it. Two things actually. 
And readers will have to read all the way down to the conclusions to find out the key one, but the setup is that it is too cheap.


WellNeo Sugar (2117) To Buy Toyo Sugar (2107) - Too Cheap, No Synergies Paid, but Too Small

<ul>
<li>Today after the close, <a href="https://www.smartkarma.com/entities/global-food-creators-co-ltd" target="_blank" data-smartkarma-citation="entities:20883:1" rel="noopener">Global Food Creators (7559 JP)</a> announced that the CEO would sell his 1.23% of the company into an MBO by a company he set up. </li>
<li>The family company which owns 27%, and he would fund the takeover of the other 73% with 1% equity taken from his share sale, and 99% bank loans. </li>
<li>The TOB is at 0.65x book for a cash-rich company. Liquidate the cash and the rest is being taken over at 0.33x book. Aaaaargh. </li>
</ul>


Today after the close, Global Food Creators (7559 JP) announced that the CEO would sell his 1.23% of the company into an MBO by a company he set up. 
The family company which owns 27%, and he would fund the takeover of the other 73% with 1% equity taken from his share sale, and 99% bank loans. 
The TOB is at 0.65x book for a cash-rich company. Liquidate the cash and the rest is being taken over at 0.33x book. Aaaaargh. 


Global Foods Creators (7559) - Another Stupidly Cheap MBO With Rigged DCF

Japan

HIKARI TSUSHIN, INC. is a mobile telecommunication service subscription agency. The Company also operates telecommunication services stores, HIT SHOP, which sell cellular telephones, and related goods.  Hikari Tsushin also sells office automation equipment and insurance.

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Hikari Tsushin (9435 JP)

Rezil (176A JP): Bain’s Tender Offer Is a Done Deal

The offer is attractive as it aligns with the midpoint of the target IFA DCF valuation range, represents an all-time high and is 129.2% above the...

Arun George

[Japan Buyback] Sankyo (6417) - Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE

Sankyo Corp is a good business in an unloved industry. Multiples are low. Cashflows are often great, until they are not. This company is super cash...

Travis Lundy

Warren Buffett and the Japanese Trading Houses I

Today, National Indemnity - BRK's holdco for owning Japanese trading co shares - announced it had upped its stake in each of the five trading...

Travis Lundy

WellNeo Sugar (2117) To Buy Toyo Sugar (2107) - Too Cheap, No Synergies Paid, but Too Small

The former Nissin Sugar now called WellNeo Sugar is taking over tiny cap Toyo Sugar. Marubeni owns 40% and is selling. There was one activistish-y...

Travis Lundy

Global Foods Creators (7559) - Another Stupidly Cheap MBO With Rigged DCF

Dirt cheap very smallcap MBO. Being done at 0.65x book outright, and 0.33x ex-cash book. Simple small company making prepared foods for hotels...

Travis Lundy

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