Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

15 months ago, an electronics trading company called <a href="https://www.smartkarma.com/entities/ukc-holdings-corp" target="_blank" data-smartkarma-citation="entities:5466:1" rel="noopener">Restar Holdings Corporation (3156 JP)</a> (formerly UKC, which itself had been a target of well-known Japanese activist Murakami-san) made a <a href="http://www.kabupro.jp/edp/20190520/S100FSQA.pdf" target="_blank" rel="noopener">Large Shareholder Release</a> to the effect that it had purchased a 20.00% stake (a bit higher in terms of voting rights) in another semiconductor and electronics trading house <a href="https://www.smartkarma.com/entities/ryoyo-electro-corp" target="_blank" data-smartkarma-citation="entities:16757:1" rel="noopener">Ryoyo Electro (8068 JP)</a>"because we believe that by expanding our business area (especially system businesses), we can strengthen our lineup and customer strategy, and we expect synergies and innovative business."Ryoyo appears to have been caught <a href="https://www.ryoyo.co.jp/info/ir/7460/" target="_blank" rel="noopener">unaware</a> on the 13th when Restar announced that its board had decided to purchase shares and did so the same day. It made it clear the attention was unsolicited and this was a hostile acquisition. In March of last year, Ryoyo Electro upped its shareholder return policy, and this year it upped it further. Now it is going a step further.  <h2>The NEW News</h2>The new news is that <a href="https://www.smartkarma.com/entities/ryoyo-electro-corp" target="_blank" data-smartkarma-citation="entities:16757:1" rel="noopener">Ryoyo Electro (8068 JP)</a> will conduct a Tender Offer to buy back its shares and Restar has agreed to sell. This was announced yesterday along with <a href="https://www.ryoyo.co.jp/en/wenp/wp-content/uploads/2020/08/2020Q2_Financial-Review.pdf" target="_blank" rel="noopener">Q2 results</a>. The <a href="https://www.ryoyo.co.jp/wryyp/wp-content/uploads/2020/08/ir301.pdf" target="_blank" rel="noopener">Tender Offer</a> (Japanese-only) is set at ¥2,990 which means Restar has made serious coin on its position of a year and change. The Tender Offer quantity is set at a maximum of 7,357,900 shares which is 5% more than the quantity Restar has agreed to sell. The purchase amount is ¥22 billion. There are some who would call this greenmail. Others, I am sure, will be kinder. There is a trade here. Lots more below the fold. <div></div>

15 months ago, an electronics trading company called Restar Holdings Corporation (3156 JP) (formerly UKC, which itself had been a target of well-known Japanese activist Murakami-san) made a Large Shareholder Release to the effect that it had purchased a 20.00% stake (a bit higher in terms of voting rights) in another semiconductor and electronics trading house Ryoyo Electro (8068 JP)"because we believe that by expanding our business area (especially system businesses), we can strengthen our lineup and customer strategy, and we expect synergies and innovative business."Ryoyo appears to have been caught unaware on the 13th when Restar announced that its board had decided to purchase shares and did so the same day. It made it clear the attention was unsolicited and this was a hostile acquisition. In March of last year, Ryoyo Electro upped its shareholder return policy, and this year it upped it further. Now it is going a step further.  The NEW NewsThe new news is that Ryoyo Electro (8068 JP) will conduct a Tender Offer to buy back its shares and Restar has agreed to sell. This was announced yesterday along with Q2 results. The Tender Offer (Japanese-only) is set at ¥2,990 which means Restar has made serious coin on its position of a year and change. The Tender Offer quantity is set at a maximum of 7,357,900 shares which is 5% more than the quantity Restar has agreed to sell. The purchase amount is ¥22 billion. There are some who would call this greenmail. Others, I am sure, will be kinder. There is a trade here. Lots more below the fold. 

Ryoyo Electro Corporate Activism Ends in Buyout

Restar Holdings Corporation / Event-Driven

Friday after the close, <a href="https://www.smartkarma.com/entities/563" target="_blank" data-smartkarma-citation="entities:563:1">Sony Corp (6758 JP)</a>-linked smallcap ($300-350mm each) semiconductor wholesalers <a href="https://www.smartkarma.com/entities/5466" target="_blank" data-smartkarma-citation="entities:5466:1">UKC Holdings (3156 JP)</a> and <a href="https://www.smartkarma.com/entities/7840" target="_blank" data-smartkarma-citation="entities:7840:1">Vitec Holdings (9957 JP)</a> announced they had agreed to merge as of April 1 2019, with UKC being the surviving entity. The UKC entity will spin off its device business to a Vitel sub called VGEL, and will become the parent holding company of three businesses - the integrated device business, the other UKC businesses, and the other Vitec businesses. The holding company will be renamed. Sony is the top shareholder (14.23%) at UKC and the second largest shareholder at Vitec (4.99%). The ratio is 1:1 meaning it appears there is a 0.6% spread to be earned vs today's close but that spread doesn't exist. Details below.This appears to be a straightforward merger of two smallcaps who look to survive in a competitive market and where they expect synergies from integrating their device businesses. There may be more here than meets the eye.

Friday after the close, Sony Corp (6758 JP)-linked smallcap ($300-350mm each) semiconductor wholesalers UKC Holdings (3156 JP) and Vitec Holdings (9957 JP) announced they had agreed to merge as of April 1 2019, with UKC being the surviving entity. The UKC entity will spin off its device business to a Vitel sub called VGEL, and will become the parent holding company of three businesses - the integrated device business, the other UKC businesses, and the other Vitec businesses. The holding company will be renamed. Sony is the top shareholder (14.23%) at UKC and the second largest shareholder at Vitec (4.99%). The ratio is 1:1 meaning it appears there is a 0.6% spread to be earned vs today's close but that spread doesn't exist. Details below.This appears to be a straightforward merger of two smallcaps who look to survive in a competitive market and where they expect synergies from integrating their device businesses. There may be more here than meets the eye.

UKC/Vitec Merger To Bring Murakami Gang Activism?

Japan

Restar Holdings Corporation is a holding company which manages operations for its subsidiaries.  Group companies wholesale semiconductors, electronic components and equipment.  UKC Holdings also designs semiconductors and software through its subsidiaries.

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Restar Holdings Corporation (3156 JP)

Ryoyo Electro Corporate Activism Ends in Buyout

A Partial Tender Offer Stock Buyback. Japan treatment is special. Don't assume you would participate. It's technical.

Travis Lundy

UKC/Vitec Merger To Bring Murakami Gang Activism?

Friday after the close, Sony Corp (6758 JP)-linked smallcap ($300-350mm each) semiconductor wholesalers UKC Holdings (3156 JP) and Vitec Holdings...

Travis Lundy

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