Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Four-Plus years ago, <a href="https://www.smartkarma.com/entities/open-house-co-ltd" target="_blank" data-smartkarma-citation="entities:19550:1" rel="noopener">Open House (3288 JP)</a> bought the stake in <a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a> owned by its embattled CEO (who had been arrested for a scandal). </li>
<li>Four years ago, Open House launched a partial tender and capital injection to go to ~65%. A takeout was a matter of time.</li>
<li>That time has come. Today Open House announced a Tender Offer to take Pressance fully-private. This is an easy deal. A done deal. Done too cheap.</li>
</ul>


Four-Plus years ago, Open House (3288 JP) bought the stake in Pressance Corp (3254 JP) owned by its embattled CEO (who had been arrested for a scandal). 
Four years ago, Open House launched a partial tender and capital injection to go to ~65%. A takeout was a matter of time.
That time has come. Today Open House announced a Tender Offer to take Pressance fully-private. This is an easy deal. A done deal. Done too cheap.


Open House Finally Takes Out Pressance (3254) - Done Deal Done Cheap

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>
<a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a> announced a tender offer from <a href="https://www.smartkarma.com/entities/open-house-co-ltd" target="_blank" data-smartkarma-citation="entities:19550:1" rel="noopener">Open House (3288 JP)</a> at JPY2,390 per share, a 22.1% premium to the last close.</li>
<li>While the offer is below book value, it represents an all-time high and broadly aligns with the mid-point of the target IFA’s DCF valuation range.  </li>
<li>The low minimum acceptance condition (2.3 million or 3.25% ownership ratio) suggests a done deal. The offer runs from 14 January to 26 February (30 business days).</li>
</ul>



Pressance Corp (3254 JP) announced a tender offer from Open House (3288 JP) at JPY2,390 per share, a 22.1% premium to the last close.
While the offer is below book value, it represents an all-time high and broadly aligns with the mid-point of the target IFA’s DCF valuation range.  
The low minimum acceptance condition (2.3 million or 3.25% ownership ratio) suggests a done deal. The offer runs from 14 January to 26 February (30 business days).


Pressance (3254 JP): Open House (3288 JP) JPY2,390 Tender Offer a Done Deal

Sanei Architecture Planning / Event-Driven

<ul>
<li>[cue Tom Hardy gif saying "That's Bait"]. But yes, this story has a backstory to the Japanese underworld, and while the original sin may have been minor, it's everything.</li>
<li>The firm was raided, the CEO resigned, a govt authority "recommended" Sanei get rid of Mr Koike's influence, banks got antsy, employee morale dropped. Sanei needed a saviour.</li>
<li>Koike-San asked <a href="https://www.smartkarma.com/entities/open-house-co-ltd" target="_blank" data-smartkarma-citation="entities:19550:1" rel="noopener">Open House (3288 JP)</a> to buy his shares. They agreed to take over the company. It's basically a done deal with a possible twist.</li>
</ul>


[cue Tom Hardy gif saying "That's Bait"]. But yes, this story has a backstory to the Japanese underworld, and while the original sin may have been minor, it's everything.
The firm was raided, the CEO resigned, a govt authority "recommended" Sanei get rid of Mr Koike's influence, banks got antsy, employee morale dropped. Sanei needed a saviour.
Koike-San asked Open House (3288 JP) to buy his shares. They agreed to take over the company. It's basically a done deal with a possible twist.


Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner

True to the sentiment expressed by the <a href="https://www.smartkarma.com/entities/idemitsu-kosan-co-ltd" target="_blank" data-smartkarma-citation="entities:109:1" rel="noopener">Idemitsu Kosan (5019 JP)</a> Finance Dept chief who spoke at the earnings news conference last week, Idemitsu Kosan did not change the price on its ¥2450/share Tender Offer for <a href="https://www.smartkarma.com/entities/toa-oil-co-ltd" target="_blank" data-smartkarma-citation="entities:11021:1" rel="noopener">Toa Oil Co Ltd (5008 JP)</a>.Yesterday, the Tender Offer closed without fanfare. Today Idemitsu announced the results (<a href="https://ssl4.eir-parts.net/doc/5019/ir_material9/154414/00.pdf" target="_blank" rel="noopener">English</a>, <a href="https://www.idss.co.jp/content/100034505.pdf" target="_blank" rel="noopener">Japanese</a>). Because Idemitsu already owned 50+% it only needed 2,058,875 shares which was 16+% or roughly a third of the minority to get to 66.7% to squeeze out remaining minority shareholders. Idemitsu got 470,668 shares, or 3.82%. In my first insight <a href="https://www.smartkarma.com/insights/idemitsu-launches-lowball-tender-offer-for-subsidiary-toa-oil-5008" target="_blank" data-smartkarma-citation="insights:46384" rel="noopener">Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008)</a>, I showed what I thought the shareholder structure breakdown for support looked like. In that table, I suggested at a minimum, it was likely to get support from financial and corporate crossholders 483,000 shares) and from directors (13,500 shares). They did not even get that much. Cornwall Capital, which had climbed from 18+% to 26.5+% during the course of the Tender Offer obviously did not tender, but neither did 99% of the other non-crossholder-held shares. This was an enormous failure for Idemitsu. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/093/original/Screenshot+2021-02-16+at+8.26.07+PM.png?1613478380" class="editor-image img-responsive" data-smartkarma-image-id="189093"></figure></section>What next? Read on.

True to the sentiment expressed by the Idemitsu Kosan (5019 JP) Finance Dept chief who spoke at the earnings news conference last week, Idemitsu Kosan did not change the price on its ¥2450/share Tender Offer for Toa Oil Co Ltd (5008 JP).Yesterday, the Tender Offer closed without fanfare. Today Idemitsu announced the results (English, Japanese). Because Idemitsu already owned 50+% it only needed 2,058,875 shares which was 16+% or roughly a third of the minority to get to 66.7% to squeeze out remaining minority shareholders. Idemitsu got 470,668 shares, or 3.82%. In my first insight Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008), I showed what I thought the shareholder structure breakdown for support looked like. In that table, I suggested at a minimum, it was likely to get support from financial and corporate crossholders 483,000 shares) and from directors (13,500 shares). They did not even get that much. Cornwall Capital, which had climbed from 18+% to 26.5+% during the course of the Tender Offer obviously did not tender, but neither did 99% of the other non-crossholder-held shares. This was an enormous failure for Idemitsu. What next? Read on.

Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores

Friday after the close, <a href="https://www.smartkarma.com/entities/open-house-co-ltd" target="_blank" data-smartkarma-citation="entities:19550:1" rel="noopener">Open House (3288 JP)</a> announced the results of the Partial Tender Offer (Tender Offer for 19.8815mm shares) for <a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a>.Pro-Ration ended up at 60.92%. This was a LOT lower than I expected. The breakdown of the Tender Offer provided by the Offeror in its MOF Filing suggests a few of the reasons for why this occurred, and one can look at the tendered quantities and deduce a few elements of what may happen going forward.

Friday after the close, Open House (3288 JP) announced the results of the Partial Tender Offer (Tender Offer for 19.8815mm shares) for Pressance Corp (3254 JP).Pro-Ration ended up at 60.92%. This was a LOT lower than I expected. The breakdown of the Tender Offer provided by the Offeror in its MOF Filing suggests a few of the reasons for why this occurred, and one can look at the tendered quantities and deduce a few elements of what may happen going forward. 

Pressance Partial Tender - Almost EVERYONE Tendered

Japan

Pressance Corporation develops and sells condominiums. The Company also provides leasing and managing services for office buildings, condominiums, and parking lots.

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Pressance Corp (3254 JP)

Open House Finally Takes Out Pressance (3254) - Done Deal Done Cheap

Open House bought control of Pressance four years ago. Now they are buying it out. It's clearly being done at the wrong price but Open House,...

Travis Lundy

Pressance (3254 JP): Open House (3288 JP) JPY2,390 Tender Offer a Done Deal

While the offer is below book value, it represents an all-time high and broadly aligns with the mid-point of the target IFA’s DCF valuation range.

Arun George

Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner

Sanei Architecture Planning (3228) got in a spot of bother with a yakuza-linked payment. That is forcing the change in control, and a tender offer...

Travis Lundy

Toa Oil (5008) - The Dog Has Caught the Car, But Beware Mangalores

The Idemitsu Tender Offer for Toa failed. Independent shareholders stayed away in droves. Next, Idemitsu may be inclined to try something less...

Travis Lundy

Pressance Partial Tender - Almost EVERYONE Tendered

Pressance Tender Pro-ration came in well below where I expected, suggesting almost everyone who could tender did tender. The headline residual is...

Travis Lundy

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