Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last week I wrote about <a href="https://www.smartkarma.com/insights/ntt-s-partial-offer-for-marketing-consultant-intage-4326" target="_blank" data-smartkarma-citation="insights:112399" rel="noopener">NTT's Partial Offer for Marketing Consultant Intage (4326) -</a> (with a spurious hyphen at the end). </li>
<li>In the last couple of days, there have apparently been a few blocks printed on the tape. I have received questions about pricing and pro-ration. </li>
<li>So here I provide a set of 11 possible pro-ration cases, and suggest ways for traders and investors to think about the risks and possibilities.</li>
</ul>


Last week I wrote about NTT's Partial Offer for Marketing Consultant Intage (4326) - (with a spurious hyphen at the end). 
In the last couple of days, there have apparently been a few blocks printed on the tape. I have received questions about pricing and pro-ration. 
So here I provide a set of 11 possible pro-ration cases, and suggest ways for traders and investors to think about the risks and possibilities.


NTT's Partial Offer for Intage (4326) Part Deux - Refining Pro-Ration Expectations

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-active-value-fund-plc" target="_blank" data-smartkarma-citation="entities:31492:1" rel="noopener">Nippon Active Value Fund PLC (NAVF LN)</a>’s jointly-held shareholding in <a href="https://www.smartkarma.com/entities/intage-holdings-inc" target="_blank" data-smartkarma-citation="entities:3151:1" rel="noopener">Intage Holdings (4326 JP)</a> has declined from 11.28% to 9.52% of outstanding shares (disclosed on 20 September).</li>
<li>NAVF wants to take as much money off the table as possible as <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a>’s partial offer price represents an all-time high.</li>
<li>Our revised minimum proration is 53.31%. NAVF’s action suggests that the minimum acceptance condition, which requires a 20% minority acceptance rate, should be satisfied.</li>
</ul>



Nippon Active Value Fund PLC (NAVF LN)’s jointly-held shareholding in Intage Holdings (4326 JP) has declined from 11.28% to 9.52% of outstanding shares (disclosed on 20 September).
NAVF wants to take as much money off the table as possible as NTT (Nippon Telegraph &amp; Telephone) (9432 JP)’s partial offer price represents an all-time high.
Our revised minimum proration is 53.31%. NAVF’s action suggests that the minimum acceptance condition, which requires a 20% minority acceptance rate, should be satisfied.


Intage Holdings (4326 JP): NAVF Selldown and Proration for NTT’s Partial Offer

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> announced a partial offer to buy a minimum of 40.0% and a maximum of 51.0% of <a href="https://www.smartkarma.com/entities/intage-holdings-inc" target="_blank" data-smartkarma-citation="entities:3151:1" rel="noopener">Intage Holdings (4326 JP)</a>. </li>
<li>Six crossholders holding 20.98% between them have separately agreed to tender a total of 19.9%. That means a minimum 25.4% minority participation. With success, minimum pro-ration is 51.5%. </li>
<li>The dynamics of this deal and where synergies lie suggests people need to think really hard about where they underwrite future illiquid ownership. </li>
</ul>


Today, NTT (Nippon Telegraph &amp; Telephone) (9432 JP) announced a partial offer to buy a minimum of 40.0% and a maximum of 51.0% of Intage Holdings (4326 JP). 
Six crossholders holding 20.98% between them have separately agreed to tender a total of 19.9%. That means a minimum 25.4% minority participation. With success, minimum pro-ration is 51.5%. 
The dynamics of this deal and where synergies lie suggests people need to think really hard about where they underwrite future illiquid ownership. 


NTT's Partial Offer for Marketing Consultant Intage (4326) -

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> has announced a partial tender offer for <a href="https://www.smartkarma.com/entities/intage-holdings-inc" target="_blank" data-smartkarma-citation="entities:3151:1" rel="noopener">Intage Holdings (4326 JP)</a> to make it a consolidated subsidiary. </li>
<li>The offer is for a minimum of 15.4m shares (40.00% ownership ratio) and a maximum of 19.6m shares (51.00%) at JPY2,400 per share, a 26.4% premium to the undisturbed price.</li>
<li>Irrevocables represent a 19.90% ownership ratio. The minimum acceptance condition requires a 20% minority acceptance rate. The offer is attractive and represents an all-time high.</li>
</ul>



NTT (Nippon Telegraph &amp; Telephone) (9432 JP) has announced a partial tender offer for Intage Holdings (4326 JP) to make it a consolidated subsidiary. 
The offer is for a minimum of 15.4m shares (40.00% ownership ratio) and a maximum of 19.6m shares (51.00%) at JPY2,400 per share, a 26.4% premium to the undisturbed price.
Irrevocables represent a 19.90% ownership ratio. The minimum acceptance condition requires a 20% minority acceptance rate. The offer is attractive and represents an all-time high.


Intage Holdings (4326 JP): NTT’s Partial Tender Offer

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

<ul>
<li>Some low liquidity stocks in the TOPIX Index carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.</li>
<li>These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will enjoy buying flows from passive trackers of TOPIX.</li>
<li>In this insight, we take a look at Quiddity's final predictions for the names that are likely to see their Liquidity Factors removed in April 2023.</li>
</ul>


Some low liquidity stocks in the TOPIX Index carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.
These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will enjoy buying flows from passive trackers of TOPIX.
In this insight, we take a look at Quiddity's final predictions for the names that are likely to see their Liquidity Factors removed in April 2023.


TOPIX Index Upweights: Final Predictions for The "The Big April Basket” 2023

Japan

Intage Holdings Inc provides marketing research services, marketing system solutions, and consulting services.

Intage Holdings (4326 JP)

NTT's Partial Offer for Intage (4326) Part Deux - Refining Pro-Ration Expectations

When I wrote this, 9 out of 11 cases presented, including my base case, had NAVF-held shares being tendered (whether they sell, or they tender)....

Travis Lundy