Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On Friday, <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> announced its expected use of funds into the May 2024 results, including a special dividend plan, investment for growth, and "strengthening the operating platform."</li>
<li>The plan will disappoint. The stock may get hit hard. The truth is somewhere in the middle. This is where active stewardship matters. So get stewarding.</li>
<li>A special div paid over 5yrs should be paid one-shot, now. If the company has plans worth supporting, set KPIs now, ask for money later. Good plans get good money.</li>
</ul>


On Friday, Pasona Group (2168 JP) announced its expected use of funds into the May 2024 results, including a special dividend plan, investment for growth, and "strengthening the operating platform."
The plan will disappoint. The stock may get hit hard. The truth is somewhere in the middle. This is where active stewardship matters. So get stewarding.
A special div paid over 5yrs should be paid one-shot, now. If the company has plans worth supporting, set KPIs now, ask for money later. Good plans get good money.


Pasona (2168 JP) Special Div - Too Small to Matter

David Blennerhassett

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi (8750 JP)</a> agreed with <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona (2168 JP)</a> for Pasona to sell its shares back to <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a> in a buyback after Dai-Ichi's Tender Offer for Benefit.</li>
<li>This process gives Pasona a tax advantage versus selling into a Tender Offer at the same price.</li>
<li>What does Pasona take home? ~¥2,822/share versus its last price of ¥2,733/share. Then you have stubs ops (conservatively worth up to ~¥1,960/share) and Pasona's stake in <a href="https://www.smartkarma.com/entities/bewith-inc" target="_blank" data-smartkarma-citation="entities:35846:1" rel="noopener">Bewith (9216 JP)</a> (~¥360/share).</li>
</ul>



Dai Ichi (8750 JP) agreed with Pasona (2168 JP) for Pasona to sell its shares back to Benefit One (2412 JP) in a buyback after Dai-Ichi's Tender Offer for Benefit.
This process gives Pasona a tax advantage versus selling into a Tender Offer at the same price.
What does Pasona take home? ~¥2,822/share versus its last price of ¥2,733/share. Then you have stubs ops (conservatively worth up to ~¥1,960/share) and Pasona's stake in Bewith (9216 JP) (~¥360/share).


<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced a TOB for <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a> having agreed a deal with <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> to sell into a buyback.</li>
<li>Pasona will get ¥1,526/share, and having agreed, it <a href="https://www.pasonagroup.co.jp/LinkClick.aspx?fileticket=o93EYocia9U%3d&amp;tabid=100&amp;mid=460" target="_blank" rel="noopener">announced</a> the expected special profit to be booked in the FY to 31 May 2024.</li>
<li>At ¥113.6bn on a consolidated basis (¥122.3bn on parent), less ¥1.165bn of associated costs, that's ¥112.4bn at the lower end. That's ¥2,870/share. Then there's the rest of the business.</li>
</ul>


Today, Dai Ichi Life Insurance (8750 JP) announced a TOB for Benefit One Inc (2412 JP) having agreed a deal with Pasona Group (2168 JP) to sell into a buyback.
Pasona will get ¥1,526/share, and having agreed, it announced the expected special profit to be booked in the FY to 31 May 2024.
At ¥113.6bn on a consolidated basis (¥122.3bn on parent), less ¥1.165bn of associated costs, that's ¥112.4bn at the lower end. That's ¥2,870/share. Then there's the rest of the business.


Pasona (2168) - Less Wrong Than Before But How Wrong Still Depends on Nambu-San

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a>  announced a proposed counter/over-bid for <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a>. ¥1800/share for minorities and a better (undefined) outcome for <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a>. </li>
<li>This throws the cat amongst the pigeons as it is unsolicited, for 100% not just to get Pasona's stake, and it will require Benefit One recommend or not.</li>
<li>For Pasona, this deal structure would likely increase the net result from the stake sale, possibly substantially so. It's in the details. </li>
</ul>


Today, Dai Ichi Life Insurance (8750 JP)  announced a proposed counter/over-bid for Benefit One Inc (2412 JP). ¥1800/share for minorities and a better (undefined) outcome for Pasona Group (2168 JP). 
This throws the cat amongst the pigeons as it is unsolicited, for 100% not just to get Pasona's stake, and it will require Benefit One recommend or not.
For Pasona, this deal structure would likely increase the net result from the stake sale, possibly substantially so. It's in the details. 


New Deal for Benefit One (2168) Could Mean Lots More Money for Pasona (2168)

<ul>
<li>As discussed <a href="https://www.smartkarma.com/insights/big-m3-2413-partial-tob-as-pasona-sells-control-of-benefit-one-2412-really-interesting-dynamics" target="_blank" rel="noopener">here</a> in a piece about the Partial Tender Offer<a href="https://www.smartkarma.com/insights/big-m3-2413-partial-tob-as-pasona-sells-control-of-benefit-one-2412-really-interesting-dynamics" target="_blank" data-smartkarma-citation="insights:117493" rel="noopener"></a>, Pasona Group (2168) has agreed to sell its controlling stake in Benefit One (2412) to M3 (2413).</li>
<li>That will leave Pasona Group with a fair chunk of cash and possibly a residual stake in Benefit One, depending on the results.</li>
<li>Though we don't know what the future holds, Pasona now is the wrong price for its future. </li>
</ul>


As discussed here in a piece about the Partial Tender Offer, Pasona Group (2168) has agreed to sell its controlling stake in Benefit One (2412) to M3 (2413).
That will leave Pasona Group with a fair chunk of cash and possibly a residual stake in Benefit One, depending on the results.
Though we don't know what the future holds, Pasona now is the wrong price for its future. 


Japan

Pasona Group Inc. manages companies that provide placement and staffing services for clients in the information technology sector.

Pasona Group (2168 JP)

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