IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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>
<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

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

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

In <a href="https://www.smartkarma.com/insights/pressance-3254-jp-partial-tender-yummy" target="_blank" data-smartkarma-citation="insights:45354" rel="noopener">Pressance (3254 JP) Partial Tender - YUMMY!</a> I looked at the partial tender which was being launched by the much larger Kanto-based <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> on Kansai-based <a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a>, a partial tender offer combined with a third-party placement by Pressance to Open House after the Tender Offer designed to get Open House to a 65% ownership level in Pressance. 65% is near the maximum that an owner can get to without being obliged to launch a tender offer for all shares outstanding, and it sets up the new owner for both control and near-super-majority control when including both Open House's future 65% stake and the 7% held by financial and corporate cross-holders and existing directors outside the shares held by former and disgraced CEO Yamagishi-san, who will be selling his shares in the Tender Offer. I thought the trade pretty "yummy." I still think so. The shareholding has changed somewhat dramatically since the Tender Offer was launched, but not in a way that dramatically changes the outcome I expected. Discussion ensues.

In Pressance (3254 JP) Partial Tender - YUMMY! I looked at the partial tender which was being launched by the much larger Kanto-based Open House (3288 JP) on Kansai-based Pressance Corp (3254 JP), a partial tender offer combined with a third-party placement by Pressance to Open House after the Tender Offer designed to get Open House to a 65% ownership level in Pressance. 65% is near the maximum that an owner can get to without being obliged to launch a tender offer for all shares outstanding, and it sets up the new owner for both control and near-super-majority control when including both Open House's future 65% stake and the 7% held by financial and corporate cross-holders and existing directors outside the shares held by former and disgraced CEO Yamagishi-san, who will be selling his shares in the Tender Offer. I thought the trade pretty "yummy." I still think so. The shareholding has changed somewhat dramatically since the Tender Offer was launched, but not in a way that dramatically changes the outcome I expected. Discussion ensues.

Pressance Partial - Last Chance To Buy The Tender Residual Cheap

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)

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

Pressance Partial - Last Chance To Buy The Tender Residual Cheap

Pressance (3254 JP) Partial Tender by Open House (3288 JP) is priced too low, and designed to transfer control. Buying and tendering gets one long...

Travis Lundy

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