Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On 16 October, the Asset Management Co of <a href="https://www.smartkarma.com/entities/sankei-real-estate-inc" target="_blank" data-smartkarma-citation="entities:35239:1" rel="noopener">Sankei Real Estate (2972 JP)</a> announced earnings, the execution of a Revival Plan, and said the sponsor, Sankei Building would buy more.</li>
<li>They'll buy for up to 220 days starting sometime before Feb-end. Presumably after the Revival Plan transactions have been executed. </li>
<li>The REIT is cheap to peers. It is small to peers. It needs some reviving. But when a sponsor promises to buy, it pays to take a look. </li>
</ul>


On 16 October, the Asset Management Co of Sankei Real Estate (2972 JP) announced earnings, the execution of a Revival Plan, and said the sponsor, Sankei Building would buy more.
They'll buy for up to 220 days starting sometime before Feb-end. Presumably after the Revival Plan transactions have been executed. 
The REIT is cheap to peers. It is small to peers. It needs some reviving. But when a sponsor promises to buy, it pays to take a look. 


Sponsor of Sankei Real Estate (2972) To Buy More Units in Revival Plan

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Invincible Investment / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/invincible-investment-corp" target="_blank" data-smartkarma-citation="entities:3617:1" rel="noopener">Invincible Investment (8963 JP)</a> plans to raise around US$230m to fund the acquisition of six hotel assets in Japan.</li>
<li>The stock has done well over the past year and so have most of its deals which we have covered in the past.</li>
<li>In this note, we talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Invincible Investment (8963 JP) plans to raise around US$230m to fund the acquisition of six hotel assets in Japan.
The stock has done well over the past year and so have most of its deals which we have covered in the past.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.


Invincible Investment Corp Placement - Decent Accretion Despite the Large Dilution

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-excellent-inc" target="_blank" data-smartkarma-citation="entities:12745:1" rel="noopener">Japan Excellent (8987 JP)</a> has been the worst-performing Office J-REIT amongst the existing crop since the end of 2019.</li>
<li>Today, we got news of a possible flow event - a buyer.</li>
<li>There is room here for Japan Excellent to outperform over the next several months.</li>
</ul>



Japan Excellent (8987 JP) has been the worst-performing Office J-REIT amongst the existing crop since the end of 2019.
Today, we got news of a possible flow event - a buyer.
There is room here for Japan Excellent to outperform over the next several months.


Japan Excellent REIT (8987) - Possible Sustained Flow Event

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.

Mapletree North Asia Commercial Trust / Event-Driven

Mapletree North Asia Commercial Trust (MAGIC SP)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106:1" rel="noopener">Mapletree Commercial Trust (MCT SP)</a>’s EGM, <a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127:1" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a>/MNACT’s EGM and trust scheme meeting will take place on 23 May. The effective date is 8 August.</li>
<li>The IFA considers the scheme consideration to be fair. We think that IFA’s valuation approach is broadly sound with some areas for improvement. </li>
<li>For a 17 August payment, the gross and annualised spread of the cash-only consideration (including permitted clean-up DPU) is 1.6% and 5.6%, respectively. </li>
</ul>



Mapletree Commercial Trust (MCT SP)’s EGM, Mapletree North Asia Commercial Trust (MAGIC SP)/MNACT’s EGM and trust scheme meeting will take place on 23 May. The effective date is 8 August.
The IFA considers the scheme consideration to be fair. We think that IFA’s valuation approach is broadly sound with some areas for improvement. 
For a 17 August payment, the gross and annualised spread of the cash-only consideration (including permitted clean-up DPU) is 1.6% and 5.6%, respectively. 


MNACT's Scheme Meeting on 23 May, IFA Opinion

<p>On 5 April, Starwood Capital Group launched a hostile Tender Offer on <a href="https://www.smartkarma.com/entities/invesco-office-j-reit-inc" target="_blank" data-smartkarma-citation="entities:7414:1" rel="noopener">Invesco Office J Reit (3298 JP)</a> to take over the J-REIT at ¥20,000/share, a 13% premium at the time.</p><p>It was the first hostile tender offer designed to take over a REIT in Japan. This was done without notice or warning. Invesco was not pleased. </p><p>For whatever reason, it took until the third day for the REIT to trade at terms. The "terms" were in fact ¥20,000/unit plus the ¥402/unit in expected dividends to be paid as of the end of the fiscal period ending 30 April 2021. It could actually come out higher if Invesco wanted to strip the REIT of excess cash but not a lot higher because leverage is pretty high.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/204/676/original/Screenshot+2021-05-06+at+7.54.23+PM.png?1620304651" class="editor-image img-responsive" data-smartkarma-image-id="204676"></figure></section><p>The arrows were my "bullish" (green), and "bearish" comments in prior insights. Given this is an arbitrage trade, the price moves and parameters required to flip are quite narrow. The last insight suggested buying back at 0.5% through ex-div terms, which is where the shares traded for much of the 28th and 30th of May (so investors should be long).</p><p>The units have traded at or above Terms+Dividend on all days since April 8. </p><p>Invesco responded by saying that it would reserve judgment on its Opinion Statement, but initially asked Starwood to lengthen the Tender Offer Period so Invesco could hold an EGM to get shareholder approval for the deal because if enough people accepted it, everyone else would get squeezed out without recourse to appraisal rights under the Companies Act because the squeezeout proposed was under the Investment Trust Act - itself a possibly illegal move.</p><p>Starwood rejected the proposal to lengthen the Tender, leaving Invesco with a legal fight and or White Knight option. </p><p>Insights to date are listed below.</p><table class="table table-striped"><tbody>
<tr>
<td style="width: 132px;"><h3>Date</h3></td>
<td style="width: 572px;"><h3>Insight Title</h3></td>
</tr>
<tr>
<td style="width: 132px;">5 April 2021</td>
<td style="width: 572px;">
<a href="https://www.smartkarma.com/insights/starwood-targets-japan-s-first-hostile-reit-full-tob-for-invesco-office-j-reit" target="_blank" data-smartkarma-citation="insights:49976" rel="noopener">Starwood Targets Japan's First Hostile REIT Full TOB for Invesco Office J-REIT</a> </td>
</tr>
<tr>
<td style="width: 132px;">8 April 2021</td>
<td style="width: 572px;">
<a href="https://www.smartkarma.com/insights/starwood-hostile-reit-tender-launched" target="_blank" data-smartkarma-citation="insights:50112" rel="noopener">Starwood Hostile REIT Tender Launched</a> </td>
</tr>
<tr>
<td style="width: 132px;">15 April 2021</td>
<td style="width: 572px;">
<a href="https://www.smartkarma.com/insights/invesco-office-j-reit-responds-to-starwood-s-hostile-offer" target="_blank" data-smartkarma-citation="insights:50381" rel="noopener">Invesco Office J-REIT Responds to Starwood's Hostile Offer</a> </td>
</tr>
<tr>
<td style="width: 132px;">23 April 2021</td>
<td style="width: 572px;">
<a href="https://www.smartkarma.com/insights/starwood-rejection-of-extension-means-full-hostile-tender" target="_blank" data-smartkarma-citation="insights:50641" rel="noopener">Starwood Rejection of Extension Means Full Hostile Tender</a> </td>
</tr>
</tbody></table><h2>The NEW News</h2><p>The NEW News out today after the close is that Invesco has officially <a href="http://www.invesco-reit.co.jp/file/en-news-a4c6e3cb798557f1ff9a03dad4e284e3b2495ada.pdf" target="_blank" rel="noopener">released</a> a Revised Opinion Statement which is AGAINST the Offer, and asks unitholders to not tender, and for those who have <em>already</em> tendered it asks such shareholders to withdraw their tender submission.</p><p>Furthermore, it notes that it has requested a Requested Party - Invesco Investments (Bermuda) Ltd (indirect holder of 3.06% of units outstanding) - to purchase units on the market so as to obstruct the Tender Offer by Starwood. </p><p>It is not a white knight putting out an opposing bid. It is, rather, an off-white knight - quite beige even - standing in while the price is is near the Tender Offer, with a buying power designed to absorb selling interest so that the selling interest does not tender.</p><p>This is a wrinkle. There are considerations. And more wrinkles. </p><p>Investors should consider carefully all the parameters. </p><p>I outline them below.</p>

On 5 April, Starwood Capital Group launched a hostile Tender Offer on Invesco Office J Reit (3298 JP) to take over the J-REIT at ¥20,000/share, a 13% premium at the time.It was the first hostile tender offer designed to take over a REIT in Japan. This was done without notice or warning. Invesco was not pleased. For whatever reason, it took until the third day for the REIT to trade at terms. The "terms" were in fact ¥20,000/unit plus the ¥402/unit in expected dividends to be paid as of the end of the fiscal period ending 30 April 2021. It could actually come out higher if Invesco wanted to strip the REIT of excess cash but not a lot higher because leverage is pretty high.The arrows were my "bullish" (green), and "bearish" comments in prior insights. Given this is an arbitrage trade, the price moves and parameters required to flip are quite narrow. The last insight suggested buying back at 0.5% through ex-div terms, which is where the shares traded for much of the 28th and 30th of May (so investors should be long).The units have traded at or above Terms+Dividend on all days since April 8. Invesco responded by saying that it would reserve judgment on its Opinion Statement, but initially asked Starwood to lengthen the Tender Offer Period so Invesco could hold an EGM to get shareholder approval for the deal because if enough people accepted it, everyone else would get squeezed out without recourse to appraisal rights under the Companies Act because the squeezeout proposed was under the Investment Trust Act - itself a possibly illegal move.Starwood rejected the proposal to lengthen the Tender, leaving Invesco with a legal fight and or White Knight option. Insights to date are listed below.

Date
Insight Title


5 April 2021

Starwood Targets Japan's First Hostile REIT Full TOB for Invesco Office J-REIT 


8 April 2021

Starwood Hostile REIT Tender Launched 


15 April 2021

Invesco Office J-REIT Responds to Starwood's Hostile Offer 


23 April 2021

Starwood Rejection of Extension Means Full Hostile Tender 

The NEW NewsThe NEW News out today after the close is that Invesco has officially released a Revised Opinion Statement which is AGAINST the Offer, and asks unitholders to not tender, and for those who have already tendered it asks such shareholders to withdraw their tender submission.Furthermore, it notes that it has requested a Requested Party - Invesco Investments (Bermuda) Ltd (indirect holder of 3.06% of units outstanding) - to purchase units on the market so as to obstruct the Tender Offer by Starwood. It is not a white knight putting out an opposing bid. It is, rather, an off-white knight - quite beige even - standing in while the price is is near the Tender Offer, with a buying power designed to absorb selling interest so that the selling interest does not tender.This is a wrinkle. There are considerations. And more wrinkles. Investors should consider carefully all the parameters. I outline them below.

Invesco Office OPPOSES Starwood Hostile Offer and Gets a Distinctly Beige Knight

Japan

Ichigo Office REIT Investment Corporation is a real estate investment trust (J-REIT). The Company mainly invests in office buildings in major cities in Japan. The REIT merged with FC Residential Investment Corporation in 2005.

Ichigo Office REIT Investment Corporation (8975 JP)

Ichigo Office REIT Investment Corporation

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Ichigo Office REIT Investment Corporation (8975 JP)

Invincible Investment Corp Placement - Decent Accretion Despite the Large Dilution

Invincible Investment plans to raise around US$230m to fund the acquisition of six hotel assets in Japan. In this note, we talk about the deal...

Sumeet Singh

Japan Excellent REIT (8987) - Possible Sustained Flow Event

Japan Excellent is a mid-range (but small) office J-REIT. Slightly under-levered. Slightly high dividend. The sponsor wants greater investor...

Travis Lundy

MNACT's Scheme Meeting on 23 May, IFA Opinion

The IFA considers the scheme consideration to be fair. For a 17 August payment, the annualised spread of the cash-only consideration (including...

Arun George

Invesco Office OPPOSES Starwood Hostile Offer and Gets a Distinctly Beige Knight

Invesco Office rejects the Starwood Offer and asks a Beige Knight to buy shares in the market upping their stake during the TOB. It isn't...

Travis Lundy

Price Gauge

52-week Range

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Sponsor of Sankei Real Estate (2972) To Buy More Units in Revival Plan

Earnings remain burdened by low occupancy in Shinagawa. There's a plan to deal with that. Then there's a plan for the Sponsor to buy 9.99% of...

Travis Lundy

Invincible Investment Corp Placement - Decent Accretion Despite the Large Dilution

Invincible Investment plans to raise around US$230m to fund the acquisition of six hotel assets in Japan. In this note, we talk about the deal...

Sumeet Singh

Japan Excellent REIT (8987) - Possible Sustained Flow Event

Japan Excellent is a mid-range (but small) office J-REIT. Slightly under-levered. Slightly high dividend. The sponsor wants greater investor...

Travis Lundy

MNACT's Scheme Meeting on 23 May, IFA Opinion

The IFA considers the scheme consideration to be fair. For a 17 August payment, the annualised spread of the cash-only consideration (including...

Arun George

Invesco Office OPPOSES Starwood Hostile Offer and Gets a Distinctly Beige Knight

Invesco Office rejects the Starwood Offer and asks a Beige Knight to buy shares in the market upping their stake during the TOB. It isn't...

Travis Lundy