Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Late on 23 March 2021, <a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a> announced that it had purchased 2,030,999,369 shares of <a href="https://www.smartkarma.com/entities/jih-sun-financial-holdings" target="_blank" data-smartkarma-citation="entities:17971:1" rel="noopener">Jih Sun Financial (5820 TT)</a> in the Tender Offer, exceeding the minimum purchase amount of 1,886,603,386 shares. 
It's done. Payment should be made within five business days (i.e. by March 30 2021).
It also means that one of the two large shareholders did not tender. 
And that starts a process.
We will find out between 24 March and 7 April who the large seller was. I expect we find out tomorrow through TDNet. Watch for a possible revision to annual forecast from <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a>. 
As a reminder of the associated origin story, I recommend reading <a href="https://www.smartkarma.com/insights/2021-high-conviction-shinsei-bank" target="_blank" data-smartkarma-citation="insights:46544" rel="noopener">2021 High Conviction - Shinsei Bank</a> followed by <a href="https://www.smartkarma.com/insights/2021-high-conviction-update-shinsei-bank-float-squeeze-to-mitigate-near-term" target="_blank" data-smartkarma-citation="insights:48989" rel="noopener">2021 High Conviction Update - Shinsei Bank Float Squeeze to Mitigate Near-Term</a> though at this point (the stock is up 50% since I wrote in late December) one can wait for confirmation of the tender sale.

Late on 23 March 2021, Fubon Financial Holding Co (2881 TT) announced that it had purchased 2,030,999,369 shares of Jih Sun Financial (5820 TT) in the Tender Offer, exceeding the minimum purchase amount of 1,886,603,386 shares. 
It's done. Payment should be made within five business days (i.e. by March 30 2021).
It also means that one of the two large shareholders did not tender. 
And that starts a process.
We will find out between 24 March and 7 April who the large seller was. I expect we find out tomorrow through TDNet. Watch for a possible revision to annual forecast from Shinsei Bank (8303 JP). 
As a reminder of the associated origin story, I recommend reading 2021 High Conviction - Shinsei Bank followed by 2021 High Conviction Update - Shinsei Bank Float Squeeze to Mitigate Near-Term though at this point (the stock is up 50% since I wrote in late December) one can wait for confirmation of the tender sale. 

Jih Sun Tender Offer Successful - Now the Squeezeout

David Blennerhassett

Last Week in Event SPACE: Jardines, Xiaomi, Tilt Renew, Kumho Petro, Kunlun Energy, Takeei/Rever

The Tender Offer for <a href="https://www.smartkarma.com/entities/jih-sun-financial-holdings" target="_blank" data-smartkarma-citation="entities:17971:1" rel="noopener">Jih Sun Financial (5820 TT)</a> by <a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a> closes on 23 March. The original close was 1 February but a 50-day extension was granted as requested, to 23 March. In Taiwan, Tender Offers are for a minimum of 20 days and a maximum of 50 days, and an extension can be granted for 50 days. There are further extensions possible for "reasonable cause" upon application to the FSC, but it is not clear that exists in this case. I expect if Fubon wants it, the FSC would be inclined to grant it. There appears to be substantial regulatory support for the deal as a first among what may be many such future financial holding company consolidations. But there remain questions as to whether this gets done or not.

The Tender Offer for Jih Sun Financial (5820 TT) by Fubon Financial Holding Co (2881 TT) closes on 23 March. The original close was 1 February but a 50-day extension was granted as requested, to 23 March. In Taiwan, Tender Offers are for a minimum of 20 days and a maximum of 50 days, and an extension can be granted for 50 days. There are further extensions possible for "reasonable cause" upon application to the FSC, but it is not clear that exists in this case. I expect if Fubon wants it, the FSC would be inclined to grant it. There appears to be substantial regulatory support for the deal as a first among what may be many such future financial holding company consolidations. But there remain questions as to whether this gets done or not. 

Equity Bottom-Up

11 weeks ago yesterday, for the end of 2020, I published my report <a href="https://www.smartkarma.com/insights/2021-high-conviction-shinsei-bank" target="_blank" data-smartkarma-citation="insights:46544" rel="noopener">2021 High Conviction - Shinsei Bank</a> idea. Since the close of the next day, the shares are up 46.7%. A large part of that performance has been due to the rise in the TOPIX Bank Index - up 26.7% in the same period. Much of that move has occurred in the past five weeks as The Great Rotation, driven by higher rates, a steeper curve, and inflationary expectations, has propelled last year's losers to this year's winners, and <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a>, SaaS stocks, junk stocks, and others have underperformed. But there were a couple of other bits in the story too. A buyback, an asset sale, and understanding of the float dynamics given the over-arching goal of <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> and its shareholders is to be able to get the government out of its shares (and accompanying oversight) it purchased in March 2000. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/193/195/original/Screenshot+2021-03-10+at+1.09.10+AM.png?1615309764" class="editor-image img-responsive" data-smartkarma-image-id="193195"></figure></section>This insight provides a brief update to those inputs.

11 weeks ago yesterday, for the end of 2020, I published my report 2021 High Conviction - Shinsei Bank idea. Since the close of the next day, the shares are up 46.7%. A large part of that performance has been due to the rise in the TOPIX Bank Index - up 26.7% in the same period. Much of that move has occurred in the past five weeks as The Great Rotation, driven by higher rates, a steeper curve, and inflationary expectations, has propelled last year's losers to this year's winners, and Tesla Motors (TSLA US), SaaS stocks, junk stocks, and others have underperformed. But there were a couple of other bits in the story too. A buyback, an asset sale, and understanding of the float dynamics given the over-arching goal of Shinsei Bank (8303 JP) and its shareholders is to be able to get the government out of its shares (and accompanying oversight) it purchased in March 2000. This insight provides a brief update to those inputs.

2021 High Conviction Update - Shinsei Bank Float Squeeze to Mitigate Near-Term

Yesterday, the Taiwan Fair Trade Commission announced its "non-prohibition" of the takeover of <a href="https://www.smartkarma.com/entities/jih-sun-financial-holdings" target="_blank" data-smartkarma-citation="entities:17971:1" rel="noopener">Jih Sun Financial (5820 TT)</a> by <a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a>.
As a reminder, this deal was put forth on 18 December 2020 by Fubon at TWD 13.00/share, to purchase 50.01-100.00% of Jih Sun Financial in a Tender Offer, making it the first merger in Taiwan of financial holding companies. 
It came with an FSC stamp of approval baked in, but not TFTC, and days after the deal was announced, there were questions about Fubon's intentions with regard to one of the shareholders. 
Yesterday, the Taiwan Fair Trade Commission gave its stamp of approval. Now it's a question of whether Fubon can get to 50%.

Yesterday, the Taiwan Fair Trade Commission announced its "non-prohibition" of the takeover of Jih Sun Financial (5820 TT) by Fubon Financial Holding Co (2881 TT).
As a reminder, this deal was put forth on 18 December 2020 by Fubon at TWD 13.00/share, to purchase 50.01-100.00% of Jih Sun Financial in a Tender Offer, making it the first merger in Taiwan of financial holding companies. 
It came with an FSC stamp of approval baked in, but not TFTC, and days after the deal was announced, there were questions about Fubon's intentions with regard to one of the shareholders. 
Yesterday, the Taiwan Fair Trade Commission gave its stamp of approval. Now it's a question of whether Fubon can get to 50%.

Fubon Financial Deal for Jih Sun Gets TFTC Signoff

Taiwan

Jih Sun Financial Holding Co., Ltd. was a financial holding company based in Taipei, Taiwan. Its core businesses included investment and the management of invested businesses, with operations across financial holding, consolidated securities, banking, and other segments. The company was founded in 2002 and was acquired by Fubon Financial Holding in 2022.

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Jih Sun Financial Holding (5820 TT)

Jih Sun Tender Offer Successful - Now the Squeezeout

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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

Jih Sun Financial Deal Down To The Wire

Fubon deal for Jih Sun comes down to the wire. Extension is possible but there is no word from either of the two big holders. Jih Sun trades at...

Travis Lundy

2021 High Conviction Update - Shinsei Bank Float Squeeze to Mitigate Near-Term

Shinsei Bank has performed dramatically well in the last 11 weeks since the High Conviction Idea. A lot of that has been float compression. Some of...

Travis Lundy

Fubon Financial Deal for Jih Sun Gets TFTC Signoff

Fubon Deal to Acquire Jih Sun Financial gets Taiwan FTC approval. There are a couple of boxes still to tick but tough ones are done. The question...

Travis Lundy

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