Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>
<a href="https://www.smartkarma.com/entities/japan-eyewear-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40217:1" rel="noopener">Japan Eyewear Holdings (5889 JP)</a> continues to be our top pre-event pick for TOPIX Inclusion.</li>
<li>
<a href="https://www.smartkarma.com/entities/core-concept-technologies-inc" target="_blank" data-smartkarma-citation="entities:34323:1" rel="noopener">Core Concept Technologies Inc (4371 JP)</a> is another potential TOPIX Inclusion candidate but it is quite far away from being satisfy the main Section Transfer requirements.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.

Japan Eyewear Holdings (5889 JP) continues to be our top pre-event pick for TOPIX Inclusion.

Core Concept Technologies Inc (4371 JP) is another potential TOPIX Inclusion candidate but it is quite far away from being satisfy the main Section Transfer requirements.


TOPIX Inclusions: Who Is Ready (Jan 2025)

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>Reently-Listed <a href="https://www.smartkarma.com/entities/tokyo-metro-co-ltd" target="_blank" data-smartkarma-citation="entities:40930:1" rel="noopener">Tokyo Metro (9023 JP)</a>, <a href="https://www.smartkarma.com/entities/rigaku-holdings-corporation" target="_blank" data-smartkarma-citation="entities:43950:1" rel="noopener">Rigaku Holdings (268A JP)</a>, and <a href="https://www.smartkarma.com/entities/intermestic-inc" target="_blank" data-smartkarma-citation="entities:43929:1" rel="noopener">Intermestic (262A JP)</a> were added to the TOPIX index at the end of November 2024.</li>
<li>Our long-term pre-event candidate <a href="https://www.smartkarma.com/entities/japan-eyewear-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40217:1" rel="noopener">Japan Eyewear Holdings (5889 JP)</a> has applied for a Section Transfer to the Prime Market which means there could be TOPIX Inclusion in the near future.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
Reently-Listed Tokyo Metro (9023 JP), Rigaku Holdings (268A JP), and Intermestic (262A JP) were added to the TOPIX index at the end of November 2024.
Our long-term pre-event candidate Japan Eyewear Holdings (5889 JP) has applied for a Section Transfer to the Prime Market which means there could be TOPIX Inclusion in the near future.


TOPIX Inclusions: Who Is Ready (Dec 2024)

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>On 4 December, Bloomberg reported that the <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> MBO is set to include plans for a US Assets IPO to raise more than JPY1 trillion. </li>
<li>The MBO faces two immediate challenges: securing financing and the Board’s approval. The US Assets IPO would help alleviate both these issues.</li>
<li>The potential market cap of US Assets is around US$24 billion, or 53% of 7&amp;i’s market cap. The US Assets IPO should also encourage Couche-Tard to persist with its offer. </li>
</ul>


On 4 December, Bloomberg reported that the Seven &amp; I Holdings (3382 JP) MBO is set to include plans for a US Assets IPO to raise more than JPY1 trillion. 
The MBO faces two immediate challenges: securing financing and the Board’s approval. The US Assets IPO would help alleviate both these issues.
The potential market cap of US Assets is around US$24 billion, or 53% of 7&amp;i’s market cap. The US Assets IPO should also encourage Couche-Tard to persist with its offer. 


Seven & I Holdings (3382 JP): The MBO Is Starting to Shape Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> did not dispute the <a href="https://www3.nhk.or.jp/news/html/20241119/k10014643321000.html" target="_blank" rel="noopener">NHK article’s</a> claims that the founding family aims to raise buyout funds by the end of the fiscal year.</li>
<li>Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible. </li>
<li>The MBO’s aggressive completion timeline pressures <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a> to respond by either overbidding, working with the founding family at the back-end or walking away.</li>
</ul>



Seven &amp; I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible. 
The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.


Seven & I Holdings (3382 JP): Evaluating the Potential MBO

<ul>
<li>In response to media reports, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> confirmed receiving a non-binding proposal from Junro Ito (founder’s son) and Ito-Kogyo. No terms were disclosed.</li>
<li>Bloomberg suggests an MBO deal worth up to JPY9 trillion (US$58 billion), which implies an offer of JPY3,467.89, a 39.3% premium to the last close price.</li>
<li>The "white knight" MBO undermines <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a>’s offer and is a proxy for the restructuring plan's value. Couche-Tard will likely walk if a binding MBO proposal emerges.</li>
</ul>


In response to media reports, Seven &amp; I Holdings (3382 JP) confirmed receiving a non-binding proposal from Junro Ito (founder’s son) and Ito-Kogyo. No terms were disclosed.
Bloomberg suggests an MBO deal worth up to JPY9 trillion (US$58 billion), which implies an offer of JPY3,467.89, a 39.3% premium to the last close price.
The "white knight" MBO undermines Alimentation Couche-Tard (ATD CN)’s offer and is a proxy for the restructuring plan's value. Couche-Tard will likely walk if a binding MBO proposal emerges.


Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value

Japan

McDonald's Holdings Company (Japan), Ltd. operates a hamburger fast food restaurant chain throughout Japan.  The Company operates its own stores and franchise stores.

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Mcdonald's Japan (2702 JP)

TOPIX Inclusions: Who Is Ready (Jan 2025)

There are currently 83 names that satisfy all 5 key Segment Transfer requirements based on current data. Another 90 names can satisfy 4 out of 5...

Janaghan Jeyakumar, CFA

TOPIX Inclusions: Who Is Ready (Dec 2024)

Japan Eyewear Holdings (5889 JP) is likely to have a TOPIX Inclusion event in 1H 2025 and this might help the stock outperform the TOPIX index...

Janaghan Jeyakumar, CFA

Seven & I Holdings (3382 JP): The MBO Is Starting to Shape Up

The US Assets IPO would help the founding family secure financing and the Board's recommendation. However, it would also encourage Couche-Tard to...

Arun George

Seven & I Holdings (3382 JP): Evaluating the Potential MBO

The NHK article increases the credibility of the MBO. The completion time pressures Couche-Tard to respond by either overbidding, working on a...

Arun George

Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value

The "white knight" MBO undermines Couche-Tard’s offer and is a proxy for the restructuring plan's value. Couche-Tard will likely walk if a binding...

Arun George

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