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>EQT/<a href="https://www.smartkarma.com/entities/digital-garage-inc" target="_blank" data-smartkarma-citation="entities:13747:1" rel="noopener">Digital Garage (4819 JP)</a> revised its offer for <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com Inc (2371 JP)</a> to JPY3,570, a 3.5% premium over the previous JPY3,450 offer and a 1.4% premium over Bain/LY’s JPY3,520 base offer.</li>
<li>The latest EQT/DG offer is the minimum needed to stay on the right side of the competing-offer clauses, thereby retaining KDDI’s support and potentially getting Oasis to switch allegiance.</li>
<li>Bain/<a href="https://www.smartkarma.com/entities/ly-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">LY (4689 JP)</a> continue to have room to respond with a revised offer. The competitive auction could push the final winning bid towards JPY3,800.</li>
</ul>


EQT/Digital Garage (4819 JP) revised its offer for Kakaku.com Inc (2371 JP) to JPY3,570, a 3.5% premium over the previous JPY3,450 offer and a 1.4% premium over Bain/LY’s JPY3,520 base offer.
The latest EQT/DG offer is the minimum needed to stay on the right side of the competing-offer clauses, thereby retaining KDDI’s support and potentially getting Oasis to switch allegiance.
Bain/LY (4689 JP) continue to have room to respond with a revised offer. The competitive auction could push the final winning bid towards JPY3,800.


Kakaku.com (2371 JP): EQT/DG Again Outbids Bain/LY

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In what is rapidly becoming tedious, EQT+DG have raised their bid on Kakaku.com by 3.48% to thwart Bain's bid, which is now just 1.96% above EQT's bid. </li>
<li>If Bain wants to "win", it has to come over the top. They can raise by ¥2/share and that refreshes everything but that would just allow EQT to raise ¥2/share.</li>
<li>Kakaku.com should probably sit both down and say "Final round. We have spoken to KDDI. Put in your best bid and we will support/recommend. No crying at the casino."</li>
</ul>


In what is rapidly becoming tedious, EQT+DG have raised their bid on Kakaku.com by 3.48% to thwart Bain's bid, which is now just 1.96% above EQT's bid. 
If Bain wants to "win", it has to come over the top. They can raise by ¥2/share and that refreshes everything but that would just allow EQT to raise ¥2/share.
Kakaku.com should probably sit both down and say "Final round. We have spoken to KDDI. Put in your best bid and we will support/recommend. No crying at the casino."


[Japan M&A] EQT+DG Up Kakaku.com (2371 JP) Bid by 3.478261% to ¥3570; Bain Needs To Bump, Again

David Blennerhassett

<ul>
<li>EQT would probably jump higher and Bain would come out above that. Both would aim high to get it done and not lose the asset. Stay long <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com (2371 JP)</a>.</li>
<li>As <a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> books losses in response to contractual relief delays (or cancellation altogether[?]), Hanwha steps in with a fair offer for Austal's US unit.</li>
<li>The NAV discount has narrowed, and the implied stub is elevated, but at 0.34x forward P/B, <a href="https://www.smartkarma.com/entities/swire-pacific-limited-class-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> is still a buy.</li>
</ul>


EQT would probably jump higher and Bain would come out above that. Both would aim high to get it done and not lose the asset. Stay long Kakaku.com (2371 JP).
As Austal Ltd (ASB AU) books losses in response to contractual relief delays (or cancellation altogether[?]), Hanwha steps in with a fair offer for Austal's US unit.
The NAV discount has narrowed, and the implied stub is elevated, but at 0.34x forward P/B, Swire Pacific (19 HK) is still a buy.


Last Week In Event SPACE: Kakaku.com, Austal, Swire Pacific, Ajinomoto Malaysia

<ul>
<li>Bain+LY have come over the top of EQT+DG for <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com (2371 JP)</a>. We may get another 5% out of this, but we're closer to the end than the beginning.</li>
<li>
<a href="https://www.smartkarma.com/entities/commonwealth-bank-of-australia" target="_blank" data-smartkarma-citation="entities:14:1" rel="noopener">Commonwealth Bank of Australia (CBA AU)</a> has knock <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a> off its perch as the most shorted Aussie stock by $ value.</li>
<li>Murakami Group has, indeed, increased its stake in <a href="https://www.smartkarma.com/entities/yamada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Holdings (9831 JP)</a>. They are now at 6.26%. They are not in it because Yamada is fairly-priced vs <a href="https://www.smartkarma.com/entities/edion-corp" target="_blank" data-smartkarma-citation="entities:14358:1" rel="noopener">Edion (2730 JP)</a>.</li>
</ul>


Bain+LY have come over the top of EQT+DG for Kakaku.com (2371 JP). We may get another 5% out of this, but we're closer to the end than the beginning.

Commonwealth Bank of Australia (CBA AU) has knock Rio Tinto Ltd (RIO AU) off its perch as the most shorted Aussie stock by $ value.
Murakami Group has, indeed, increased its stake in Yamada Holdings (9831 JP). They are now at 6.26%. They are not in it because Yamada is fairly-priced vs Edion (2730 JP).


Last Week In Event SPACE: Kakaku.com, Aussie Banks, Yamada, Muyuan Foods, IAG/Suncorp

<ul>
<li>Bain/<a href="https://www.smartkarma.com/entities/ly-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">LY (4689 JP)</a> revised their <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com Inc (2371 JP)</a> offer to JPY3,520 (JPY3,640 if KDDI agrees to share buyback), a 2.0% premium to EQT/<a href="https://www.smartkarma.com/entities/digital-garage-inc" target="_blank" data-smartkarma-citation="entities:13747:1" rel="noopener">Digital Garage (4819 JP)</a>’s JPY3,450 offer.</li>
<li>The latest Bain/LY offer mirrors the EQT/DG offer by gaming the competing offer clauses. Crucially, the new disclosure of Bain/LY IFA’s valuation range points to headroom for further increases.</li>
<li>EQT/DG can match Bain/LY’s JPY3,520 offer with a modest 2.0% increase to the effective cost of its 17 July offer. If it matches Bain/LY's effective cost, EQT can offer JPY3,790.</li>
</ul>


Bain/LY (4689 JP) revised their Kakaku.com Inc (2371 JP) offer to JPY3,520 (JPY3,640 if KDDI agrees to share buyback), a 2.0% premium to EQT/Digital Garage (4819 JP)’s JPY3,450 offer.
The latest Bain/LY offer mirrors the EQT/DG offer by gaming the competing offer clauses. Crucially, the new disclosure of Bain/LY IFA’s valuation range points to headroom for further increases.
EQT/DG can match Bain/LY’s JPY3,520 offer with a modest 2.0% increase to the effective cost of its 17 July offer. If it matches Bain/LY's effective cost, EQT can offer JPY3,790.


Kakaku.com (2371 JP): More to Go as Bain/LY Return with a Revised Offer

Japan

Kakaku.com, Inc provides price comparison services and products information through its website.  The Company also provides Internet advertising services.

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Kakaku.com Inc (2371 JP)

Kakaku.com (2371 JP): EQT/DG Again Outbids Bain/LY

Oasis has no intention of accepting EQT/DG’s revised offer of JPY3,570 as long as it remains below Bain/LY’s JPY3,640 offer (KDDI exiting via a...

Arun George

[Japan M&A] EQT+DG Up Kakaku.com (2371 JP) Bid by 3.478261% to ¥3570; Bain Needs To Bump, Again

Oasis with 19.5% has put out a press release this morning asking Kakaku.com to withdraw support for the EQT/Kamgras bid or to ask Bain to come out...

Travis Lundy

Last Week In Event SPACE: Kakaku.com, Austal, Swire Pacific, Ajinomoto Malaysia

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Last Week In Event SPACE: Kakaku.com, Aussie Banks, Yamada, Muyuan Foods, IAG/Suncorp

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Kakaku.com (2371 JP): More to Go as Bain/LY Return with a Revised Offer

The latest Bain/LY offer mirrors the EQT/DG offer by gaming the competing offer clauses. Crucially, the new disclosure of Bain/LY IFA’s valuation...

Arun George

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