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>Last night, Maven <a href="https://www.businesswire.com/news/home/20260318221306/en/Maven-Publishes-Letter-on-Bain-Sponsored-Management-Buyout-Offer-for-MCJ---Highlighting-Significant-Undervaluation-and-Governance-Concerns" target="_blank" rel="noopener">issued a letter</a> regarding the unfair terms of the Bain-sponsored MBO for <a href="https://www.smartkarma.com/entities/mcj-co-ltd" target="_blank" data-smartkarma-citation="entities:14132:1" rel="noopener">MCJ Co Ltd (6670 JP)</a>. Maven has a stake of close to 3%.</li>
<li>Largely in line with Ascender’s view, Maven highlights six issues with the MBO. Maven estimates the intrinsic value at JPY2,800. Most of Maven’s criticisms are valid.</li>
<li>Despite Maven joining the cause, the probability of a bump remains low as no activist is a 5%+ shareholder, the Board has declined to engage, and the timing is strange. </li>
</ul>


Last night, Maven issued a letter regarding the unfair terms of the Bain-sponsored MBO for MCJ Co Ltd (6670 JP). Maven has a stake of close to 3%.
Largely in line with Ascender’s view, Maven highlights six issues with the MBO. Maven estimates the intrinsic value at JPY2,800. Most of Maven’s criticisms are valid.
Despite Maven joining the cause, the probability of a bump remains low as no activist is a 5%+ shareholder, the Board has declined to engage, and the timing is strange. 


MCJ (6670 JP): Maven Belatedly Joins Ascender’s Activism Cause

<ul>
<li>Since announcing the offer, <a href="https://www.smartkarma.com/entities/mcj-co-ltd" target="_blank" data-smartkarma-citation="entities:14132:1" rel="noopener">MCJ Co Ltd (6670 JP)</a>’s shares have consistently traded above the Bain-sponsored MBO offer of JPY2,200. The offer closes on 24 March. </li>
<li>On 16 February, Ascender Capital <a href="https://onedrive.live.com/?redeem=aHR0cHM6Ly8xZHJ2Lm1zL2IvYy83OWRiY2U2MzllMGVhMjY2L0lRQXFhaXItRGdQVFE3T21WVFlmZGVjREFWRHczbnM5TloyRmJqb2loamY2QThBP2U9TXA5djFk&amp;cid=79DBCE639E0EA266&amp;id=79DBCE639E0EA266%21sfe2a6a2a030e43d3b3a655361f75e703&amp;parId=79DBCE639E0EA266%21s52e69e76ff9946efbf1b4dc36d3cca83&amp;o=OneUp" target="_blank" rel="noopener">raised concerns</a> about the process and sought better terms. However, Ascender has failed to increase its stake above the 5% substantial shareholder threshold. </li>
<li>This is a done deal, as no activist has emerged as a substantial shareholder, peers have marginally re-rated, the EGM record date has been set, and FMR has sold out.   </li>
</ul>


Since announcing the offer, MCJ Co Ltd (6670 JP)’s shares have consistently traded above the Bain-sponsored MBO offer of JPY2,200. The offer closes on 24 March. 
On 16 February, Ascender Capital raised concerns about the process and sought better terms. However, Ascender has failed to increase its stake above the 5% substantial shareholder threshold. 
This is a done deal, as no activist has emerged as a substantial shareholder, peers have marginally re-rated, the EGM record date has been set, and FMR has sold out.   


MCJ (6670 JP): Risk/Reward as Shares Trade Through Terms

<ul>
<li>Today, Ascender Capital issued a <a href="https://prtimes.jp/main/html/rd/p/000000001.000178091.html" target="_blank" rel="noopener">PR Times release</a> raising concerns over what it states is a conflicted Bain-sponsored MBO for <a href="https://www.smartkarma.com/entities/mcj-co-ltd" target="_blank" data-smartkarma-citation="entities:14132:1" rel="noopener">MCJ Co Ltd (6670 JP)</a>.</li>
<li>Ascender, which first published its concerns <a href="https://onedrive.live.com/?redeem=aHR0cHM6Ly8xZHJ2Lm1zL2IvYy83OWRiY2U2MzllMGVhMjY2L0lRQXFhaXItRGdQVFE3T21WVFlmZGVjREFWRHczbnM5TloyRmJqb2loamY2QThBP2U9TXA5djFk&amp;cid=79DBCE639E0EA266&amp;id=79DBCE639E0EA266%21sfe2a6a2a030e43d3b3a655361f75e703&amp;parId=79DBCE639E0EA266%21s52e69e76ff9946efbf1b4dc36d3cca83&amp;o=OneUp" target="_blank" rel="noopener">on its website</a> on 16 February, highlights four issues with the MBO and seeks a higher price. Most of Ascender’s criticisms are valid.</li>
<li>Bain’s initial approach will be to wait until the first close approaches (24 March). However, with significant volume trading above the offer, a bump is very likely.</li>
</ul>


Today, Ascender Capital issued a PR Times release raising concerns over what it states is a conflicted Bain-sponsored MBO for MCJ Co Ltd (6670 JP).
Ascender, which first published its concerns on its website on 16 February, highlights four issues with the MBO and seeks a higher price. Most of Ascender’s criticisms are valid.
Bain’s initial approach will be to wait until the first close approaches (24 March). However, with significant volume trading above the offer, a bump is very likely.


MCJ (6670 JP): Ascender Capital Sets an Activist Campaign in Motion

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mcj-co-ltd" target="_blank" data-smartkarma-citation="entities:14132:1" rel="noopener">MCJ Co Ltd (6670 JP)</a> has recommended a Bain-sponsored MBO at JPY2,200, a 43.0% premium to the last close. </li>
<li>Mr Yuji Takashima (Chairman and CEO) will reinvest to take a 33.1% stake. The offer represents an all-time high and aligns with the midpoint of the IFA DCF valuation range.</li>
<li>However, the sale process was lacking (no auction) and is light compared to peer multiples. Barring the emergence of an activist, this is a done deal. </li>
</ul>



MCJ Co Ltd (6670 JP) has recommended a Bain-sponsored MBO at JPY2,200, a 43.0% premium to the last close. 
Mr Yuji Takashima (Chairman and CEO) will reinvest to take a 33.1% stake. The offer represents an all-time high and aligns with the midpoint of the IFA DCF valuation range.
However, the sale process was lacking (no auction) and is light compared to peer multiples. Barring the emergence of an activist, this is a done deal. 


MCJ (6670 JP): Bain-Sponsored MBO at JPY2,200

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 foreign holdings of TWSE Stocks as of Dec 5th. The aggregated holding was USD1,364.0bn.</li>
<li>We estimate that foreign flows to be inflows of USD819mln. We tabulate the league tables for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in MediaTek, Quanta Computer, Unimicron Technology, UMC, Asia Vital Components, Mediatek, Quanta Computer, Unimicron Technology, UMC, Asia Vital Components.</li>
</ul>


We analyzed the changes in foreign holdings of TWSE Stocks as of Dec 5th. The aggregated holding was USD1,364.0bn.
We estimate that foreign flows to be inflows of USD819mln. We tabulate the league tables for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in MediaTek, Quanta Computer, Unimicron Technology, UMC, Asia Vital Components, Mediatek, Quanta Computer, Unimicron Technology, UMC, Asia Vital Components.


TWSE Foreign Holding Weekly (Dec 5th): MediaTek, Quanta Computer, Unimicron Technology, UMC

Taiwan

Micro-Star International Co., Ltd. manufactures and markets motherboards and video graphic accelerate (VGA) cards.  The Company exports its products to Europe, North America, and other Asian countries.

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Micro Star International (2377 TT)

MCJ (6670 JP): Maven Belatedly Joins Ascender’s Activism Cause

Despite Maven joining the cause, the probability of a bump remains low as no activist is a 5%+ shareholder, the Board has declined to entertain...

Arun George

MCJ (6670 JP): Risk/Reward as Shares Trade Through Terms

Shares trade above terms, but this is a done deal as no activist has emerged as a substantial shareholder, peers have marginally re-rated, the EGM...

Arun George

MCJ (6670 JP): Ascender Capital Sets an Activist Campaign in Motion

Ascender, a long-term holder, has taken the activist mantle, pushing for a higher offer. Due to the high volume traded above the offer, another...

Arun George

MCJ (6670 JP): Bain-Sponsored MBO at JPY2,200

The offer represents an all-time high and aligns with the midpoint of the IFA DCF valuation range. However, the offer is light compared to peer...

Arun George

TWSE Foreign Holding Weekly (Dec 5th): MediaTek, Quanta Computer, Unimicron Technology, UMC

We analyzed TWSE foreign holding data for the past week and highlighted foreign holding changes in MediaTek (2454 TT), Quanta Computer (2382 TT),...

Ke Yan, CFA, FRM

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52-week Range

Market Cap (USDm)

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