Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Nikkei <a href="https://www.nikkei.com/article/DGXZQOUB072VM0X01C21A2000000/?unlock=1" target="_blank" rel="noopener">article</a> out today at 6pm JST, the day before the Tender Offer close (after most shareholders would have decided to tender). This is slimy. Really bad. </li>
<li>The original Shinsei pushback was the partial offer was coercive at a low price because it didn't offer a full exit. SBI said "only 48%." </li>
<li>
<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> should push back, changing their recommendation, which might cause a 10-day extension. That would give investors a chance to withdraw.</li>
</ul>


Nikkei article out today at 6pm JST, the day before the Tender Offer close (after most shareholders would have decided to tender). This is slimy. Really bad. 
The original Shinsei pushback was the partial offer was coercive at a low price because it didn't offer a full exit. SBI said "only 48%." 

Shinsei Bank (8303 JP) should push back, changing their recommendation, which might cause a 10-day extension. That would give investors a chance to withdraw.


SBI To Apply for Bank Holding Company License Within Year And Squeeze Out Shinsei Minorities

<ul>
<li>There were shenanigans at the <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> EGM to approve the merger with H2O subs as a vote was marked differently after the close of voting.</li>
<li>The Osaka District Court granted an injunction saying there was a "violation of laws and regulations or significant injustice in the method of resolution." In appeal the judgment was upheld.</li>
<li>Kansai Super filed a conservation appeal with the Osaka High Court, which today overturned the District Court's injunction. </li>
</ul>


There were shenanigans at the Kansai Super Market (9919 JP) EGM to approve the merger with H2O subs as a vote was marked differently after the close of voting.
The Osaka District Court granted an injunction saying there was a "violation of laws and regulations or significant injustice in the method of resolution." In appeal the judgment was upheld.
Kansai Super filed a conservation appeal with the Osaka High Court, which today overturned the District Court's injunction. 


Kansai Super (9919): Osaka High Court Overturns District Court Injunction

<ul>
<li>The Kobe District Court today granted the provisional disposition to block the <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> merger with two subsidiaries of <a href="https://www.smartkarma.com/entities/h2o-retailing-corp" target="_blank" data-smartkarma-citation="entities:17562:1" rel="noopener">H2 O Retailing (8242 JP)</a>. </li>
<li>The Court said that the "method of resolution of the EGM" was "illegal or significantly unjust."</li>
<li>The Share Exchange scheduled for December 1st is now suspended, and we await Kansai Super's appeal, but this sets up an interesting December for the stock.</li>
</ul>


The Kobe District Court today granted the provisional disposition to block the Kansai Super Market (9919 JP) merger with two subsidiaries of H2 O Retailing (8242 JP). 
The Court said that the "method of resolution of the EGM" was "illegal or significantly unjust."
The Share Exchange scheduled for December 1st is now suspended, and we await Kansai Super's appeal, but this sets up an interesting December for the stock.


The Kobe District Court Decides To Halt the Kansai Super Merger - Kansai Super Will Appeal

<ul>
<li>OK Store had wanted to buy <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> and offered to conduct a TOB at a high premium</li>
<li>
<a href="https://www.smartkarma.com/entities/h2o-retailing-corp" target="_blank" data-smartkarma-citation="entities:17562:1" rel="noopener">H2 O Retailing (8242 JP)</a> arranged a merger between Kansai Super and a couple of its subs which was a backdoor takeover. The EGM was problematic. Really problematic.</li>
<li>OK has filed a preliminary injunction to halt the merger. Now it offers to launch a TOB if stopped. And there is another (invisible) long-term problem if it isn't halted.
</li>
</ul>


OK Store had wanted to buy Kansai Super Market (9919 JP) and offered to conduct a TOB at a high premium

H2 O Retailing (8242 JP) arranged a merger between Kansai Super and a couple of its subs which was a backdoor takeover. The EGM was problematic. Really problematic.
OK has filed a preliminary injunction to halt the merger. Now it offers to launch a TOB if stopped. And there is another (invisible) long-term problem if it isn't halted.



OK Store Reiterates Intention to Launch Kansai Super TOB But There Is Invisible Post-Merger Risk

A week ago in <a href="https://www.smartkarma.com/insights/kansai-super-9919-still-not-super-as-shareholders-agree-h2o-deal" target="_blank" data-smartkarma-citation="insights:59970" rel="noopener">Kansai Super (9919) Still Not Super as Shareholders Agree H2O Deal</a> I wrote that the merger between Kansai Super and two of H2O's unlisted units had passed the EGM on the 29th and the local comments had been that it had been close. That deal had been announced 31 August and is due to go into effect on 1 December. Something of a shotgun marriage.The EGM was going to be contested because the third largest shareholder OK Corp had, as discussed in <a href="https://www.smartkarma.com/insights/the-kansai-super-9919-conundrum" target="_blank" data-smartkarma-citation="insights:57564" rel="noopener">The Kansai Super (9919) Conundrum</a>, cried "Chotto Mattaaaa!" (the rough equivalent is "Now hold on a second!") and launched a public re-proposal of its proposal from the summer - three months before the announcement of the H2O deal - which would have, in addition to probably making more sense, meant a huge cash payout for shareholders. Kansai Super rejected it in favor of its long-time "parent" company, so we went to EGM without further deliberating the OK Corp deal. We later found out that the Mochikabukai (the Trading Partner Shareholding Association, which owned about 9% as second largest grouping, and is usually a sure ally for any management team) had had disagreements amongst the members, with several corporate shareholders being quite vocal. In the end the vote had been split rather than voted down the line. After the mochikabukai meeting, H2O and Kansai Super put the full court press on corporate and financial crossholder partners to get them to vote FOR.OK Corp petitioned the court to appoint an EGM Inspector General to make sure the EGM was conducted properly and investigate the procedure for calling the EGM, and when the votes were counted, the Chairman of the Kansai Super EGM said that the vote had passed as proposed. But there were no details. Details are often published on EDINET shortly after the meeting. This time they were published on the 4th - a full week later, and they were a shocker. The proposals for the merger needed two-thirds of the vote, and the major one (Item 1) got 66.68%. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/650/original/Screenshot+2021-11-09+at+8.41.26+PM.png?1636461711" class="editor-image img-responsive" data-smartkarma-image-id="240650"></figure></section>That is as tight as I have EVER seen a vote. The vote could not be assured by the time the meeting was held so they had to conduct "marksheet voting" on the spot for those who had attended (including those who had already mailed in a vote ballot). Then they counted and recounted, and just to be sure extended the final announcement. Apparently after 6 hours, the Chairman of the meeting went back into the meeting and said "the measures passed, just barely."With the result in, however close, the OK Corp President - cognisant that the EGM Inspector General had been on hand to oversee proceedings - said "We will accept the result."A day ago it became apparent there were problems with that vote.Serious problems. In fact it is an absolute shocker. It seemed to bother the EGM Inspector General enough that a report which normally takes 40 days to file with the court took only seven.The market took a look at the contents and decided it liked OK Corp's chances. The stock went limit up today.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/694/original/Screenshot+2021-11-09+at+10.38.15+PM.png?1636468773" class="editor-image img-responsive" data-smartkarma-image-id="240694"></figure></section>Today OK Corp said "Chotto Mattaaaa!" again.OK Corp filed a <a href="https://ok-corporation.jp/media/001/202111/%E9%96%A2%E8%A5%BF%E3%82%B9%E3%83%BC%E3%83%91%E6%A7%98%E3%81%AE%E6%A0%AA%E5%BC%8F%E4%BA%A4%E6%8F%9B%E3%81%AE%E5%B7%AE%E6%AD%A2%E3%82%81%E3%81%AE%E4%BB%AE%E5%87%A6%E5%88%86%E3%81%AE%E7%94%B3%E7%AB%8B%E3%81%A6%E3%81%AB%E3%81%A4%E3%81%84%E3%81%A6.pdf" target="_blank" rel="noopener">petition</a> with the Court for a preliminary injunction for the merger scheduled for 1 December based on improper procedure at the EGM.I've got popcorn.

A week ago in Kansai Super (9919) Still Not Super as Shareholders Agree H2O Deal I wrote that the merger between Kansai Super and two of H2O's unlisted units had passed the EGM on the 29th and the local comments had been that it had been close. That deal had been announced 31 August and is due to go into effect on 1 December. Something of a shotgun marriage.The EGM was going to be contested because the third largest shareholder OK Corp had, as discussed in The Kansai Super (9919) Conundrum, cried "Chotto Mattaaaa!" (the rough equivalent is "Now hold on a second!") and launched a public re-proposal of its proposal from the summer - three months before the announcement of the H2O deal - which would have, in addition to probably making more sense, meant a huge cash payout for shareholders. Kansai Super rejected it in favor of its long-time "parent" company, so we went to EGM without further deliberating the OK Corp deal. We later found out that the Mochikabukai (the Trading Partner Shareholding Association, which owned about 9% as second largest grouping, and is usually a sure ally for any management team) had had disagreements amongst the members, with several corporate shareholders being quite vocal. In the end the vote had been split rather than voted down the line. After the mochikabukai meeting, H2O and Kansai Super put the full court press on corporate and financial crossholder partners to get them to vote FOR.OK Corp petitioned the court to appoint an EGM Inspector General to make sure the EGM was conducted properly and investigate the procedure for calling the EGM, and when the votes were counted, the Chairman of the Kansai Super EGM said that the vote had passed as proposed. But there were no details. Details are often published on EDINET shortly after the meeting. This time they were published on the 4th - a full week later, and they were a shocker. The proposals for the merger needed two-thirds of the vote, and the major one (Item 1) got 66.68%. That is as tight as I have EVER seen a vote. The vote could not be assured by the time the meeting was held so they had to conduct "marksheet voting" on the spot for those who had attended (including those who had already mailed in a vote ballot). Then they counted and recounted, and just to be sure extended the final announcement. Apparently after 6 hours, the Chairman of the meeting went back into the meeting and said "the measures passed, just barely."With the result in, however close, the OK Corp President - cognisant that the EGM Inspector General had been on hand to oversee proceedings - said "We will accept the result."A day ago it became apparent there were problems with that vote.Serious problems. In fact it is an absolute shocker. It seemed to bother the EGM Inspector General enough that a report which normally takes 40 days to file with the court took only seven.The market took a look at the contents and decided it liked OK Corp's chances. The stock went limit up today.Today OK Corp said "Chotto Mattaaaa!" again.OK Corp filed a petition with the Court for a preliminary injunction for the merger scheduled for 1 December based on improper procedure at the EGM.I've got popcorn.

Shocking Shenanigans at the Kansai Super EGM and OK Says Chotto Mattaaaa!!!

Japan

KANSAI SUPER MARKET LTD. is a food supermarket chain operator which mainly deals in foodstuffs, daily products, and miscellaneous goods.  The Company has markets in Hyogo and Osaka areas.

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Kansai Super Market (9919 JP)

SBI To Apply for Bank Holding Company License Within Year And Squeeze Out Shinsei Minorities

SBI appears to be setting up to take majority control of Shinsei. The Nikkei carried an article about post-tender intentions for a takeover. This...

Travis Lundy

Kansai Super (9919): Osaka High Court Overturns District Court Injunction

Grave disappointment for Kansai Super (9919) shareholders as the Osaka High Court overturns the decision by the District Court, saying the EGM vote...

Travis Lundy

The Kobe District Court Decides To Halt the Kansai Super Merger - Kansai Super Will Appeal

OK Corp's petition to suspend the Kansai Super merger based on the unfairness of the EGM has been granted, preliminarily. Kansai Super will appeal...

Travis Lundy

OK Store Reiterates Intention to Launch Kansai Super TOB But There Is Invisible Post-Merger Risk

OK Store will conduct a TOB at JPY 2250/shr if the Court decides to cancel the Kansai Super merger. Stock price direction is binary, and if the...

Travis Lundy

Shocking Shenanigans at the Kansai Super EGM and OK Says Chotto Mattaaaa!!!

Shocking Shenanigans at the Kansai Super EGM are what got the "approval" to 66.68%. OK Corp had accepted the result, but disclosed the details, and...

Travis Lundy

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