Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>NTT sees a US$1 billion selldown of shares on Wednesday 29 December. </li>
<li>This is due to a weird quirk in the way TOPIX and JPX Nikkei 400 are constructed and managed - a quirk not generally seen in other major index families.</li>
<li>NTT is cheap to peers, and NTT / Peer EPSe Ratios continue to grow, up and to the right.</li>
</ul>


NTT sees a US$1 billion selldown of shares on Wednesday 29 December. 
This is due to a weird quirk in the way TOPIX and JPX Nikkei 400 are constructed and managed - a quirk not generally seen in other major index families.
NTT is cheap to peers, and NTT / Peer EPSe Ratios continue to grow, up and to the right.


Watch the $1bn Sell-On-Close on NTT (9432) Wednesday

Nishimatsu Construction Co / Event-Driven

Back in June, <a href="https://www.smartkarma.com/entities/sanshin-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:5711:1" rel="noopener">Sanshin Electronics (8150 JP)</a> announced a buyback for 28.8% of the company. It came after a long buying campaign by one specific investor. Normally this would be "good news." Those who want to get out could sell a significant portion of their holding without friction and others could look at the situation and see significant improvement to capital allocation and huge accretion. My piece was called <a href="https://www.smartkarma.com/insights/sanshin-electronics-8150-jp-big-buyback-tender-not-designed-for-you" target="_blank" data-smartkarma-citation="insights:53380" rel="noopener">Sanshin Electronics (8150 JP) BIG Buyback Tender - Not Designed For You</a> Today, <a href="https://www.smartkarma.com/entities/nishimatsu-construction-co" target="_blank" data-smartkarma-citation="entities:9945:1" rel="noopener">Nishimatsu Construction Co (1820 JP)</a> announced a similar transaction. The stock has done somewhat well over as of recent, hitting a 20+yr high in the past few weeks.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/065/original/Screenshot+2021-09-21+at+9.35.08+PM.png?1632231356" class="editor-image img-responsive" data-smartkarma-image-id="231065"></figure></section>The company has announced it will buy up to 15,000,000 shares for up to ¥54.447bn. That is 26.98% of shares outstanding. The share buyback transaction will be undertaken as a Tender Offer, running from 22 September to 20 October, with the buyback price ¥3,626/share, which is a small premium to the close - Yay!And once again......it is not for you.

Back in June, Sanshin Electronics (8150 JP) announced a buyback for 28.8% of the company. It came after a long buying campaign by one specific investor. Normally this would be "good news." Those who want to get out could sell a significant portion of their holding without friction and others could look at the situation and see significant improvement to capital allocation and huge accretion. My piece was called Sanshin Electronics (8150 JP) BIG Buyback Tender - Not Designed For You Today, Nishimatsu Construction Co (1820 JP) announced a similar transaction. The stock has done somewhat well over as of recent, hitting a 20+yr high in the past few weeks.The company has announced it will buy up to 15,000,000 shares for up to ¥54.447bn. That is 26.98% of shares outstanding. The share buyback transaction will be undertaken as a Tender Offer, running from 22 September to 20 October, with the buyback price ¥3,626/share, which is a small premium to the close - Yay!And once again......it is not for you. 

Nishimatsu Construction (1820) About to Do Its Last Buyback for a While, and You Can't Participate!

<a href="https://www.smartkarma.com/entities/sanshin-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:5711:1" rel="noopener">Sanshin Electronics (8150 JP)</a> today <a href="https://www.sanshin.co.jp/2709/" target="_blank" rel="noopener">announced</a> it would buy back up to 7 million shares in a Tender Offer at ¥2,249/share, which is higher than all any price in history save three closing prices in April 2018. It is more impressive than it sounds. The 7,000,000 shares is 28.8% of shares out, and is designed to lift the company's Return on Equity above 5%. But importantly, the 6.7 million shares which are specifically targeted here for purchase are 34.9% of the shares out less treasury shares. <div class="content-highlight">
But, like most buyback tender offers in Japan, this one is not meant for you. 
In fact, while it would be less expensive for the company to execute such a buyback offer through the ToSTNeT-3 buyback mechanism (which would entail using the same pro rata allocation as a Tender Offer), a Tender Offer is being used in this situation quite specifically as a method to deter many shareholders (including most Smartkarma readers) from tendering.  
</div>This is something where companies need to be educated by investors that investors would rather be able to participate in such tender offers than not. If you hold shares in Sanshin, or if you do not but you like big messy events like this, there is more below the fold.

Sanshin Electronics (8150 JP) today announced it would buy back up to 7 million shares in a Tender Offer at ¥2,249/share, which is higher than all any price in history save three closing prices in April 2018. It is more impressive than it sounds. The 7,000,000 shares is 28.8% of shares out, and is designed to lift the company's Return on Equity above 5%. But importantly, the 6.7 million shares which are specifically targeted here for purchase are 34.9% of the shares out less treasury shares. 
But, like most buyback tender offers in Japan, this one is not meant for you. 
In fact, while it would be less expensive for the company to execute such a buyback offer through the ToSTNeT-3 buyback mechanism (which would entail using the same pro rata allocation as a Tender Offer), a Tender Offer is being used in this situation quite specifically as a method to deter many shareholders (including most Smartkarma readers) from tendering.  
This is something where companies need to be educated by investors that investors would rather be able to participate in such tender offers than not. If you hold shares in Sanshin, or if you do not but you like big messy events like this, there is more below the fold.

Sanshin Electronics (8150 JP) BIG Buyback Tender - Not Designed For You

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

Hostile takeovers can occur in the Japanese stock market, but these tend to be between small companies; and usually there’s either some family rivalry, or a boardroom dispute, at the heart of it. However, while in the case of the <a href="https://www.smartkarma.com/entities/1493" target="_blank" data-smartkarma-citation="entities:1493:1">Solekia (9867 JP)</a> takeover battle, <a href="https://www.smartkarma.com/entities/1493" target="_blank" data-smartkarma-citation="entities:1493:1">Solekia</a> itself is tiny (current market cap of $47.8mil) and the bidder is not even a company (it is an individual, Beji Sasaki, who is the Chairman of <a href="https://www.smartkarma.com/entities/16610" target="_blank" data-smartkarma-citation="entities:16610:1">Giken Kogyo (9764 JP)</a>), the third party is <a href="https://www.smartkarma.com/entities/16968" target="_blank" data-smartkarma-citation="entities:16968:1">Fujitsu (6702 JP)</a> (with a current market…

Hostile takeovers can occur in the Japanese stock market, but these tend to be between small companies; and usually there’s either some family rivalry, or a boardroom dispute, at the heart of it. However, while in the case of the Solekia (9867 JP) takeover battle, Solekia itself is tiny (current market cap of $47.8mil) and the bidder is not even a company (it is an individual, Beji Sasaki, who is the Chairman of Giken Kogyo (9764 JP)), the third party is Fujitsu (6702 JP) (with a current market…

Fujitsu (6702)– Caught in a Bidding War

Japan

SANSHIN ELECTRONICS CO., LTD. distributes electronic parts and equipment.  The Company's products include semiconductor devices, transistors, diodes, electronic tubes, connectors, condensers, electronic coils, personal computers, telephones, and printers.

Sanshin Electronics (8150 JP)

Watch the $1bn Sell-On-Close on NTT (9432) Wednesday

NTT cancelled shares in November. That leads to a TOPIX event selldown at end-December. For NTT it is US$1bn. But NTT remains undeservedly cheap to...

Travis Lundy

Nishimatsu Construction (1820) About to Do Its Last Buyback for a While, and You Can't Participate!

Nishimatsu Construction has been bought up (25%) by Murakami affiliated cos and people. Now NC will do a Tender Offer Buyback, which is Murakami...

Travis Lundy