IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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>
<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

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<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?

<ul>
<li>The merger between <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> and <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> will go through in about 6 weeks. In the interim, there are interesting events. </li>
<li>After, there is a Partial Tender Offer. I expect <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> will have to pay up. </li>
<li>Furthermore, the stock is not overly expensive vs Peers AND there are synergies to come from the merger, making it relatively cheaper. It's not squeezy, but it's skewed.</li>
</ul>


The merger between Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) will go through in about 6 weeks. In the interim, there are interesting events. 
After, there is a Partial Tender Offer. I expect Aeon Co Ltd (8267 JP) will have to pay up. 
Furthermore, the stock is not overly expensive vs Peers AND there are synergies to come from the merger, making it relatively cheaper. It's not squeezy, but it's skewed.


[Japan Activism/M&A] - Closing In On the Tsuruha Partial Tender - Likely Needs To Be Higher

<ul>
<li>This morning the Nikkei <a href="https://www.nikkei.com/article/DGXZQOUC234HG0T20C25A5000000/" target="_blank" rel="noopener">reported</a> shareholders of <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> and <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> approved their Merger. Activists opposed but it was going to be close at best.</li>
<li>As <a href="https://www.smartkarma.com/insights/japan-activism-m-a-thinking-about-positioning-around-the-tsuruha-welcia-vote" target="_blank" rel="noopener">expected</a>, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.  </li>
<li>The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon's interest and NEWCO vs World.</li>
</ul>


This morning the Nikkei reported shareholders of Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) approved their Merger. Activists opposed but it was going to be close at best.
As expected, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.  
The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon's interest and NEWCO vs World.


[Japan Activism/M&A] - Shareholders Approve Tsuruha/Welcia Merger - Now It's Partial Offer+Synergies

<ul>
<li>Leading proxies recommend that <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> shareholders vote against the Tsuruha/<a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> merger on 26 May.</li>
<li>The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.  </li>
<li>For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.      </li>
</ul>


Leading proxies recommend that Tsuruha Holdings (3391 JP) shareholders vote against the Tsuruha/Welcia Holdings (3141 JP) merger on 26 May.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.  
For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.      


Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

Japan

MatsukiyoCocokara & Co. operates drug store chains. The Company retails medicines, cosmetics, health foods, beauty care products, and other products. MatsukiyoCocokara & also operates supermarkets and home centers.

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MatsukiyoCocokara (3088 JP)

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

[Japan Activism/M&A] - Closing In On the Tsuruha Partial Tender - Likely Needs To Be Higher

The Tsuruha/Welcia merger is official in 6 weeks. There is index buying between now and then, then a Partial Offer, then synergies to come. It's a...

Travis Lundy

[Japan Activism/M&A] - Shareholders Approve Tsuruha/Welcia Merger - Now It's Partial Offer+Synergies

Nikkei has reported the Welcia/Tsuruha merger is approved. Neither company has confirmed yet. But this means analysts start to look at synergies,...

Travis Lundy

Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

The Tsuruha vote on 26 May will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.

Arun George

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