Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>These pages have been full of long and short ideas on <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> over the past couple of years as activists got their way, then Aeon did.</li>
<li>Then Aeon didn't, and had to pay up for a partial tender. The partial tender offer was fair-ish, but the post-tender trading has taken the shares back to DIRT CHEAP.</li>
<li>The merger between Tsuruha should get synergies, and the FY-end balance sheet shows it is substantially under-levered. Forward EV/EBIT multiples are lowest in the industry. But there's passive selling soon.</li>
</ul>


These pages have been full of long and short ideas on Tsuruha Holdings (3391 JP) over the past couple of years as activists got their way, then Aeon did.
Then Aeon didn't, and had to pay up for a partial tender. The partial tender offer was fair-ish, but the post-tender trading has taken the shares back to DIRT CHEAP.
The merger between Tsuruha should get synergies, and the FY-end balance sheet shows it is substantially under-levered. Forward EV/EBIT multiples are lowest in the industry. But there's passive selling soon.


Tsuruha (3391 JP) - New Balance Sheet, New Growth, New Price (Cheap!), And Passive Selling To Come?

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Event-Driven

<ul>
<li>Tsuruha is about to absorb Welcia and together, will become a ¥2 trillion operation and far bigger than drugstore rivals. </li>
<li>This should be a winning combination given the new economies of scale, repivoted management team and national reach.</li>
<li>But there is a problem: price competition is already changing the playing field. And convenience stores are about to get serious with OTC meds.</li>
</ul>


Tsuruha is about to absorb Welcia and together, will become a ¥2 trillion operation and far bigger than drugstore rivals. 
This should be a winning combination given the new economies of scale, repivoted management team and national reach.
But there is a problem: price competition is already changing the playing field. And convenience stores are about to get serious with OTC meds.


Could Discounters Derail Tsuruha-Welcia's Ambitions?

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/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> announced a partial tender offer from <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> at JPY2,900, a 27.2% premium over the previously stated offer price of JPY2,280.</li>
<li>Aeon will acquire a maximum (upper limit) of 43.2 million shares (9.52% ownership ratio) such that it attains a 50.90% ownership ratio. There is no lower limit. </li>
<li>The offer is above the midpoint of the IFA DCF valuation range and marginally below the JPY3,100 price Aeon paid in 2024 to acquire Oasis’ stake. </li>
</ul>



Tsuruha Holdings (3391 JP) announced a partial tender offer from Aeon Co Ltd (8267 JP) at JPY2,900, a 27.2% premium over the previously stated offer price of JPY2,280.
Aeon will acquire a maximum (upper limit) of 43.2 million shares (9.52% ownership ratio) such that it attains a 50.90% ownership ratio. There is no lower limit. 
The offer is above the midpoint of the IFA DCF valuation range and marginally below the JPY3,100 price Aeon paid in 2024 to acquire Oasis’ stake. 


Tsuruha (3391 JP): Aeon (8267 JP) Bumps Its Partial Tender Offer to JPY2,900

<ul>
<li>Today, post-close of its first day of trading as MergeCo, <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> announced 12 different investors who had voted against the deal <a href="https://contents.xj-storage.jp/xcontents/AS70521/6d292fee/db4e/4ae0/8c87/a9cfe14bbd50/140120251201512689.pdf" target="_blank" rel="noopener">filed for dissenting shareholder share repurchase</a>.</li>
<li>This covers 27.154mm shares - a bit more than what Orbis owned when they last filed (25.5mm shs) and is just over half the AGM dissension.</li>
<li>This creates some weirdness. A 5+% buyback is strong accretion, but "fair price" is a question, and it could mean smaller tender offer quantity and larger eventual index selldowns.</li>
</ul>


Today, post-close of its first day of trading as MergeCo, Tsuruha Holdings (3391 JP) announced 12 different investors who had voted against the deal filed for dissenting shareholder share repurchase.
This covers 27.154mm shares - a bit more than what Orbis owned when they last filed (25.5mm shs) and is just over half the AGM dissension.
This creates some weirdness. A 5+% buyback is strong accretion, but "fair price" is a question, and it could mean smaller tender offer quantity and larger eventual index selldowns.


[Japan M&A] Possible Partial TSURUHA (3391 JP) Tender Changes - More Accretion! Smaller Tender?

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of JPX stocks as of May 23rd. The aggregated net margin trading position is USD16,904m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries, Fujikura, Sompo, Sumitomo Mitsui Financial, Furukawa Electric, Softbank, Advantest, Mizuho Financial.</li>
</ul>


We analyzed the changes in margin trading positions of JPX stocks as of May 23rd. The aggregated net margin trading position is USD16,904m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries, Fujikura, Sompo, Sumitomo Mitsui Financial, Furukawa Electric, Softbank, Advantest, Mizuho Financial.


JPX Margin Trading Weekly (May 23rd): Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries

Japan

Kusuri no Aoki Holdings Co., Ltd. operates as a holding company. The Company, through its subsidiaries, provides medicines, cosmetics, health foods, beauty care, and household products. Kusuri no Aoki Holdings serves customers in Japan.

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Kusuri no Aoki Holdings (3549 JP)

Tsuruha (3391 JP) - New Balance Sheet, New Growth, New Price (Cheap!), And Passive Selling To Come?

Tsuruha is -30% since late Dec25 when the Tender Offer ended. Goodwill amortization has scared some investors off since. The stock is now very...

Travis Lundy

Could Discounters Derail Tsuruha-Welcia's Ambitions?

Tsuruha's acquisition of Welcia creates a powerhouse in the drugstore market, but price competition poses a challenge for the new entity's success.

Michael Causton

Tsuruha (3391 JP): Aeon (8267 JP) Bumps Its Partial Tender Offer to JPY2,900

A good result for minorities, as the offer has been bumped from JPY2,280 to JPY2,900. The offer is modestly below the JPY3,100 price Aeon paid in...

Arun George

[Japan M&A] Possible Partial TSURUHA (3391 JP) Tender Changes - More Accretion! Smaller Tender?

Tsuruha announced 5+% of shares asked for appraisal rights. That means a 5+% buyback at price TBD. It might be at the Tender Price. Technicals are...

Travis Lundy

JPX Margin Trading Weekly (May 23rd): Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries

We analyzed JPX margin trading positions report for the past week and highlighted Mitsubishi Heavy Industries (7011 JP), Kusuri No Aoki (3549 JP),...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tsuruha (3391 JP) - New Balance Sheet, New Growth, New Price (Cheap!), And Passive Selling To Come?

Tsuruha is -30% since late Dec25 when the Tender Offer ended. Goodwill amortization has scared some investors off since. The stock is now very...

Travis Lundy

Could Discounters Derail Tsuruha-Welcia's Ambitions?

​Tsuruha's acquisition of Welcia creates a powerhouse in the drugstore market, but price competition poses a challenge for the new entity's success.

Michael Causton

Tsuruha (3391 JP): Aeon (8267 JP) Bumps Its Partial Tender Offer to JPY2,900

A good result for minorities, as the offer has been bumped from JPY2,280 to JPY2,900. The offer is modestly below the JPY3,100 price Aeon paid in...

Arun George

[Japan M&A] Possible Partial TSURUHA (3391 JP) Tender Changes - More Accretion! Smaller Tender?

Tsuruha announced 5+% of shares asked for appraisal rights. That means a 5+% buyback at price TBD. It might be at the Tender Price. Technicals are...

Travis Lundy

JPX Margin Trading Weekly (May 23rd): Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries

We analyzed JPX margin trading positions report for the past week and highlighted Mitsubishi Heavy Industries (7011 JP), Kusuri No Aoki (3549 JP),...

Ke Yan, CFA, FRM

Tsuruha's acquisition of Welcia creates a powerhouse in the drugstore market, but price competition poses a challenge for the new entity's success.