Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.</li>
<li>Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-April 2024.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-April 2024.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Apr 2024 Estimates

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

<ul>
<li>In August, <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> launched a Tender offer on <a href="https://www.smartkarma.com/entities/itochu-techno-solutions-corp" target="_blank" data-smartkarma-citation="entities:2431:1" rel="noopener">Itochu Techno Solutions (4739 JP)</a> to buy out minorities. </li>
<li>That tender offer ended last week, with Itochu and the acquirer vehicle owning 85+%. </li>
<li>Interestingly, there are near-term flow events as a result. Worth watching.</li>
</ul>


In August, Itochu Corp (8001 JP) launched a Tender offer on Itochu Techno Solutions (4739 JP) to buy out minorities. 
That tender offer ended last week, with Itochu and the acquirer vehicle owning 85+%. 
Interestingly, there are near-term flow events as a result. Worth watching.


Itochu TOB on Itochu Techno Solutions - The Index Selldown Schedule for $700mm+ of Flows

<ul>
<li>
<a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> today announced it had agreed with 61%-owned <a href="https://www.smartkarma.com/entities/itochu-techno-solutions-corp" target="_blank" data-smartkarma-citation="entities:2431:1" rel="noopener">Itochu Techno Solutions (4739 JP)</a> sub to take over CTC and squeeze out minorities. </li>
<li>The stock released earnings mid-day, somehow, but not on TDNet until post-close. The stock jumped in the last two hours. The Tender Offer is at a 10% premium to close.</li>
<li>Growth will be up, and there are lots of financial assets and net receivables so this is 8+x March 2025. Itochu is not overpaying. But there will be no counter.</li>
</ul>



Itochu Corp (8001 JP) today announced it had agreed with 61%-owned Itochu Techno Solutions (4739 JP) sub to take over CTC and squeeze out minorities. 
The stock released earnings mid-day, somehow, but not on TDNet until post-close. The stock jumped in the last two hours. The Tender Offer is at a 10% premium to close.
Growth will be up, and there are lots of financial assets and net receivables so this is 8+x March 2025. Itochu is not overpaying. But there will be no counter.


Itochu To Take Over Itochu Techno Solutions (CTC (4739 JP)) Just As Growth Jumps

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/itochu-techno-solutions-corp" target="_blank" data-smartkarma-citation="entities:2431:1" rel="noopener">Itochu Techno Solutions (4739 JP)</a> has recommended <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>’s tender offer of JPY4,325 per share, an 18.7% premium to the undisturbed price (1 August).</li>
<li>The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 5.43% ownership ratio.</li>
<li>The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year share price high.</li>
</ul>



Itochu Techno Solutions (4739 JP) has recommended Itochu Corp (8001 JP)’s tender offer of JPY4,325 per share, an 18.7% premium to the undisturbed price (1 August).
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 5.43% ownership ratio.
The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year share price high.


ITOCHU Techno-Solutions (4739 JP): ITOCHU's JPY4,325 Tender Offer

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents, adjusted every year in August.</li>
<li>We look at the rankings of the potential ADDs/DELs every month for the next rebal, based on most recent trading data. </li>
<li>Every month we provide trade suggestions. The last three months have seen market-neutral returns of +3.0%, +6.5%, +3.2% respectively for the one-month periods. A new trade is suggested below.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents, adjusted every year in August.
We look at the rankings of the potential ADDs/DELs every month for the next rebal, based on most recent trading data. 
Every month we provide trade suggestions. The last three months have seen market-neutral returns of +3.0%, +6.5%, +3.2% respectively for the one-month periods. A new trade is suggested below.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Mar 2024 Estimates and Another Trade Reco

Japan

ITOCHU Techno-Solutions Corporation develops and constructs computer network systems and software.  The Company also provides system maintenance services. Itochu Techno-Solutions also offers solution consulting services.

Itochu Techno Solutions (4739 JP)

Quiddity JPX-Nikkei 400 Rebal 2024: End-Apr 2024 Estimates

In total, there are 45 Potential ADDs and 46 Potential DELs (unique names) presented in the current Quiddity Leaderboard.

Janaghan Jeyakumar, CFA

Itochu TOB on Itochu Techno Solutions - The Index Selldown Schedule for $700mm+ of Flows

Itochu's purchase of Itochu Techno Solutions is a done deal. Now we wait for the full winddown. It's a big stock so there will be lots of index...

Travis Lundy

Itochu To Take Over Itochu Techno Solutions (CTC (4739 JP)) Just As Growth Jumps

Itochu announced a $2.5bn+ bid for the minorities in Itochu Techno Solutions (4739). It's a big deal. Not many cross-holders. But no chance to...

Travis Lundy