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>At the first closing date of the <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> offer, Fudosan unsurprisingly extended the close, but surprisingly, voluntarily disclosed the level of acceptances.</li>
<li>At first glance, the disclosure of acceptances was an own goal, as the shares reached new highs, giving Elliott a gift to strengthen its call to reject the offer.</li>
<li>Alternatively, Fudosan’s disclosure could be a shrewd move to signal that its likely endgame (bump marginally above 3Q book value and possibly lower minimum) will succeed.  </li>
</ul>


At the first closing date of the Toyota Industries (6201 JP) offer, Fudosan unsurprisingly extended the close, but surprisingly, voluntarily disclosed the level of acceptances.
At first glance, the disclosure of acceptances was an own goal, as the shares reached new highs, giving Elliott a gift to strengthen its call to reject the offer.
Alternatively, Fudosan’s disclosure could be a shrewd move to signal that its likely endgame (bump marginally above 3Q book value and possibly lower minimum) will succeed.  


Toyota Industries (6201 JP): Disclosure of Acceptances an Own Goal or a Shrewd Move?

<ul>
<li>The first closing date of Toyota Fudosan’s JPY18,800 offer for <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> is 12 February. Shares continue to trade above terms.</li>
<li>Ahead of the first close, internal and external factors have continued to underscore that the offer is light.</li>
<li>There are several potential scenarios at the first close. The most likely scenario is the extension of close and additional irrevocables. The least likely scenario is successful completion.</li>
</ul>


The first closing date of Toyota Fudosan’s JPY18,800 offer for Toyota Industries (6201 JP) is 12 February. Shares continue to trade above terms.
Ahead of the first close, internal and external factors have continued to underscore that the offer is light.
There are several potential scenarios at the first close. The most likely scenario is the extension of close and additional irrevocables. The least likely scenario is successful completion.


Toyota Industries (6201 JP): Scenarios Ahead of the First Close

<ul>
<li>Elliott has <a href="https://elliottletters.com/toyota-industries/" target="_blank" rel="noopener">released a letter</a> urging shareholders to reject Toyota Fudosan’s JPY18,800 offer for <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>.</li>
<li>Elliott’s letter makes both sensible (the offer is below 3Q book value, with limited downside risk on a deal break) and outlandish (the standalone plan is worth JPY40,000) assertions.</li>
<li>There is a good chance of a further bump (to JPY21,000), as an offer below the 3Q book value (disclosed on 3 February) will give Elliott’s campaign a huge boost.   </li>
</ul>


Elliott has released a letter urging shareholders to reject Toyota Fudosan’s JPY18,800 offer for Toyota Industries (6201 JP).
Elliott’s letter makes both sensible (the offer is below 3Q book value, with limited downside risk on a deal break) and outlandish (the standalone plan is worth JPY40,000) assertions.
There is a good chance of a further bump (to JPY21,000), as an offer below the 3Q book value (disclosed on 3 February) will give Elliott’s campaign a huge boost.   


Toyota Industries (6201 JP): Evaluating Elliott’s Letter

Mitsubishi Logisnext Co., Ltd. / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mitsubishi-logisnext-co-ltd" target="_blank" data-smartkarma-citation="entities:11662:1" rel="noopener">Mitsubishi Logisnext Co., Ltd. (7105 JP)</a> announced a pre-conditional tender offer from Japan Industrial Partners (JIP) at JPY1,537 per share, representing a 15.3% discount to the last close price.</li>
<li>The offer resulted from an auction process. The offer is light in comparison to peer multiples and is below the midpoint of the target IFA DCF valuation.</li>
<li>While <a href="https://www.smartkarma.com/entities/mitsubishi-heavy-industries" target="_blank" data-smartkarma-citation="entities:13613:1" rel="noopener">Mitsubishi Heavy Industries (7011 JP)</a> irrevocable has a competing proposal clause, it is unlikely that a bidding war will transpire. The low required tendering rate suggests a done deal. </li>
</ul>



Mitsubishi Logisnext Co., Ltd. (7105 JP) announced a pre-conditional tender offer from Japan Industrial Partners (JIP) at JPY1,537 per share, representing a 15.3% discount to the last close price.
The offer resulted from an auction process. The offer is light in comparison to peer multiples and is below the midpoint of the target IFA DCF valuation.
While Mitsubishi Heavy Industries (7011 JP) irrevocable has a competing proposal clause, it is unlikely that a bidding war will transpire. The low required tendering rate suggests a done deal. 


Mitsubishi Logisnext (7105 JP): JIP’s Takeunder Offer

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>~9 months ago as Japan reeled from Trump's Tariff Tantrum, Toyota Group announced a potential takeover of <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>. In June, we got a process+price. Non-transparent. Opportunistic. Unfair. </li>
<li>They valued the transaction in one way, then announced a transaction structure which immediately changes the entire asset base of the company, and creates huge excess value for the buyers.</li>
<li>Process is bad. Analysis bad. The Special Committee and Board decisions bad. Sub-1x BVPS. Transaction structure immediately offers an additional 10+% to BVPS in cash to the buyers. It's offensive.</li>
</ul>


~9 months ago as Japan reeled from Trump's Tariff Tantrum, Toyota Group announced a potential takeover of Toyota Industries (6201 JP). In June, we got a process+price. Non-transparent. Opportunistic. Unfair. 
They valued the transaction in one way, then announced a transaction structure which immediately changes the entire asset base of the company, and creates huge excess value for the buyers.
Process is bad. Analysis bad. The Special Committee and Board decisions bad. Sub-1x BVPS. Transaction structure immediately offers an additional 10+% to BVPS in cash to the buyers. It's offensive.


[Japan M&A] Toyota RE Deal for Toyota Inds (6201) Part I; Offensive Process, Light Deal, Bun Fight?

Germany

KION Group AG provides material handling solutions. The Company offers forklifts, warehouse equipments, and other industrial trucks.

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KION Group (KGX GR)

Toyota Industries (6201 JP): Disclosure of Acceptances an Own Goal or a Shrewd Move?

At first glance, the acceptance disclosure was an own goal. However, it could be a shrewd move to signal that Fudosan's likely endgame (bump...

Arun George

Toyota Industries (6201 JP): Scenarios Ahead of the First Close

The endgame is a bump, but there are several scenarios at the first close. The most likely scenario is the extension of close and add....

Arun George

Toyota Industries (6201 JP): Evaluating Elliott’s Letter

Fudosan states that the offer is the best possible price and has no intention to change it. This is largely gamesmanship to manage "bump"...

Arun George

Mitsubishi Logisnext (7105 JP): JIP’s Takeunder Offer

The precondition is satisfied, and the tender offer commences at an unchanged JPY1,537 price. The tender closes on 18 Feb, with payment from 26...

Arun George

[Japan M&A] Toyota RE Deal for Toyota Inds (6201) Part I; Offensive Process, Light Deal, Bun Fight?

I assume shareholders have been meeting Toyota Inds and Group since June. They had no effect. Deal process is still offensive. Awful governance....

Travis Lundy

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