Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-limited-class-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> seeks to further dilute its stake in <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-limited" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific (293 HK)</a> via a hybrid block placement. </li>
<li>
<a href="https://www.smartkarma.com/entities/shinsegae-co-ltd" target="_blank" data-smartkarma-citation="entities:20987:1" rel="noopener">Shinsegae (004170 KS)</a> is set take full ownership of its e-commerce platform SSG.com, in a punchy deal worth US$1bn.</li>
<li>The catalyst earlier this week in <a href="https://www.smartkarma.com/entities/kingsoft-corporation-ltd" target="_blank" data-smartkarma-citation="entities:492:1" rel="noopener">Kingsoft (3888 HK)</a> appears irrational exuberance for <a href="https://www.smartkarma.com/entities/xiaomi-corporation-class-b" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi (1810 HK)</a> (marginally) increasing its stake.</li>
</ul>



Swire Pacific (19 HK) seeks to further dilute its stake in Cathay Pacific (293 HK) via a hybrid block placement. 

Shinsegae (004170 KS) is set take full ownership of its e-commerce platform SSG.com, in a punchy deal worth US$1bn.
The catalyst earlier this week in Kingsoft (3888 HK) appears irrational exuberance for Xiaomi (1810 HK) (marginally) increasing its stake.


Last Week In Event SPACE: Swire Pacific/ Cathay, Shinsegae, Kingsoft, China Resources Power

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>Neuberger <a href="https://prtimes.jp/main/html/rd/p/000000018.000059963.html" target="_blank" rel="noopener">issued a letter</a> concerning the unfair terms of the <a href="https://www.smartkarma.com/entities/alsok-co-ltd" target="_blank" data-smartkarma-citation="entities:14181:1" rel="noopener">Alsok (2331 JP)</a> and Carlyle offer for <a href="https://www.smartkarma.com/entities/nippon-dry-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:13528:1" rel="noopener">Nippon Dry Chemical (1909 JP)</a>. The first closing date is 29 June.</li>
<li>Neuberger, the second-largest shareholder, highlights six issues with the tender offer. While Neuberger’s criticisms have merit, the Board could credibly refute most of them. </li>
<li>The probability of a bump is low, as Neuberger cannot block the tender, the offer is attractive on several measures, and ALSOK/Carlyle can use the playbook to counter activists.  </li>
</ul>


Neuberger issued a letter concerning the unfair terms of the Alsok (2331 JP) and Carlyle offer for Nippon Dry Chemical (1909 JP). The first closing date is 29 June.
Neuberger, the second-largest shareholder, highlights six issues with the tender offer. While Neuberger’s criticisms have merit, the Board could credibly refute most of them. 
The probability of a bump is low, as Neuberger cannot block the tender, the offer is attractive on several measures, and ALSOK/Carlyle can use the playbook to counter activists.  


Nippon Dry-Chemical (1909 JP): Neuberger Starts an Activist Campaign, but Success Is Uncertain

Travis Lundy

<ul>
<li>ALSOK and Carlyle produced competing bids, overbid each other, then joined, then overbid themselves, to launch a TOB to buy fire safety company <a href="https://www.smartkarma.com/entities/nippon-dry-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:13528:1" rel="noopener">Nippon Dry Chemical (1909 JP)</a>. </li>
<li>It's a ten bagger since pre-covid and 10x forward EBITDA. It's a decent outcome. But it's trading through terms a week+ after announcement despite ALSOK+corps owning 50+%.</li>
<li>While it is not impossible an activist digs their teeth in, this is long enough in the tooth that a strategic jumping in seems unlikely. </li>
</ul>


ALSOK and Carlyle produced competing bids, overbid each other, then joined, then overbid themselves, to launch a TOB to buy fire safety company Nippon Dry Chemical (1909 JP). 
It's a ten bagger since pre-covid and 10x forward EBITDA. It's a decent outcome. But it's trading through terms a week+ after announcement despite ALSOK+corps owning 50+%.
While it is not impossible an activist digs their teeth in, this is long enough in the tooth that a strategic jumping in seems unlikely. 


[Japan Event] Carlyle and ALSOK Compete Then Join To Take Over NDC (1909) - ¥3,730

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-dry-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:13528:1" rel="noopener">Nippon Dry Chemical (1909 JP)</a> is an obvious bolt-on for ALSOK. There's probably no better buyer. They are also cash-rich, and they're buying this at 10+x EBITDA. That's probably OK.</li>
<li>
<a href="https://www.smartkarma.com/entities/ck-hutchison-holdings-ltd" target="_blank" data-smartkarma-citation="entities:132:1" rel="noopener">CK Hutchison (1 HK)</a> is reportedly exploring a dual-listing of AS Watson (Hong Kong &amp; London), amid ongoing asset (ports/telcos/supermarket (?)) sales. </li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-limited" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson (JM SP)</a> goes all in - and in a new direction - with a A$2.45bn bid for I-MED Radiology Network.</li>
</ul>



Nippon Dry Chemical (1909 JP) is an obvious bolt-on for ALSOK. There's probably no better buyer. They are also cash-rich, and they're buying this at 10+x EBITDA. That's probably OK.

CK Hutchison (1 HK) is reportedly exploring a dual-listing of AS Watson (Hong Kong &amp; London), amid ongoing asset (ports/telcos/supermarket (?)) sales. 

Jardine Matheson (JM SP) goes all in - and in a new direction - with a A$2.45bn bid for I-MED Radiology Network.


Last Week In Event SPACE: Nippon Dry Chemical, CK Hutch, Jardine Matheson, Qoria, EOFlow

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-dry-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:13528:1" rel="noopener">Nippon Dry Chemical (1909 JP)</a> announced a tender offer from Alsok (2331 JP) and <a href="https://www.smartkarma.com/entities/carlyle-group-inc-the" target="_blank" data-smartkarma-citation="entities:33402:1" rel="noopener">Carlyle Group / (CG US)</a> at JPY3,730, a 23.3% premium to the last close. </li>
<li>Alsok and Carlyle initially engaged in a bidding war but eventually settled on a joint bid. Post-squeezeout, Alsok and Carlyle will hold 51% and 49% of BidCo's voting rights, respectively.</li>
<li>The offer is attractive, as it represents an all-time high and sits at the high end of the target IFA’s DCF valuation range. This is a done deal. </li>
</ul>



Nippon Dry Chemical (1909 JP) announced a tender offer from Alsok (2331 JP) and Carlyle Group / (CG US) at JPY3,730, a 23.3% premium to the last close. 
Alsok and Carlyle initially engaged in a bidding war but eventually settled on a joint bid. Post-squeezeout, Alsok and Carlyle will hold 51% and 49% of BidCo's voting rights, respectively.
The offer is attractive, as it represents an all-time high and sits at the high end of the target IFA’s DCF valuation range. This is a done deal. 


Nippon Dry Chemical (1909 JP): Alsok/Carlyle Tender Offer at JPY3,730

Japan

Nippon Dry-Chemical CO., LTD. designs and installs disaster prevention systems in general buildings, plants, and marine vessels.  The Company provides maintenance services as well as repair services.  Nippon Dry-Chemical also manufactures and sells fire extinguishers, fire alarm apparatus, and fire engines.

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Nippon Dry Chemical (1909 JP)

Last Week In Event SPACE: Swire Pacific/ Cathay, Shinsegae, Kingsoft, China Resources Power

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett