Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

This Tender Offer is still an odd duck.Today, <a href="https://www.smartkarma.com/entities/sawada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7311:1" rel="noopener">Sawada Holdings (8699 JP)</a> announced that after deliberations, the company's Board of Directors had decided to continue to Withhold its Opinion on the Tender Offer being conducted by META Capital and Upsilon Investment Partners to take control of the company. One problem is Mongolia Risk. In the first insight <a href="https://www.smartkarma.com/insights/sawada-holdings-partial-tender-an-odd-duck" target="_blank" data-smartkarma-citation="insights:36802" rel="noopener">Sawada Holdings Partial Tender - An Odd Duck</a> I noted a lack of documentation. This document appears to show that the whole thing was put together in what is in Japan a relatively short amount of time. It appears some background documentation may be insufficient. It is kind of a mess, and that does not bode well, for which I am calling myself "bearish."However, there is a caveat to this caveat, and that means I would not short.

This Tender Offer is still an odd duck.Today, Sawada Holdings (8699 JP) announced that after deliberations, the company's Board of Directors had decided to continue to Withhold its Opinion on the Tender Offer being conducted by META Capital and Upsilon Investment Partners to take control of the company. One problem is Mongolia Risk. In the first insight Sawada Holdings Partial Tender - An Odd Duck I noted a lack of documentation. This document appears to show that the whole thing was put together in what is in Japan a relatively short amount of time. It appears some background documentation may be insufficient. It is kind of a mess, and that does not bode well, for which I am calling myself "bearish."However, there is a caveat to this caveat, and that means I would not short.

Sawada Withholds Opinion on TOB - Mongolia Deal Risk May Exist

Yesterday there was an extremely brief announcement by an entity called ウプシロン投資事業有限責任組合 or Upsilon Investment Limited Partnership which itself is an entity of <a href="http://www.metacapital.co.jp/index.html" target="_blank" rel="noopener">META Capital</a> which is an investment firm owned by two former Japanese fixed income people who worked at foreign brokers in the early noughties (who share 75% ownership) and Idei Nobuyuki, former CEO of Sony (now 82yrs old), who owns 25%. The announcement was that the entity was launching a Tender Offer to buy 50.1% of <a href="https://www.smartkarma.com/entities/sawada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7311:1" rel="noopener">Sawada Holdings (8699 JP)</a> which is the former HIS Securities, which was before that HS Securities (renamed after Hideo Sawada, the entrepreneur and mover and shaker behind HIS Travel (now <a href="https://www.smartkarma.com/entities/h-i-s-co-ltd" target="_blank" data-smartkarma-citation="entities:19311:1" rel="noopener">H I S Co Ltd (9603 JP)</a>) purchased it closed to 20 years ago). The announcement said simply that it was launching a Tender Offer to start on 20 February, ending on 19 March (a 20 day period - the minimum). Sawada Holdings followed up this morning with an <a href="http://www.sawada-holdings.co.jp/wp/wp-content/uploads/2020/02/shdpress20200220_2.pdf" target="_blank" rel="noopener">announcement</a> containing the Upsilon announcement. The Tender is to buy 19,859,758 shares. Hideo Sawada owns 10,628,000 shares, or 26.81%. A company affiliated with him called 秀インター owns 1,100,000 shares or 2.77%. Together, those two entities with 11,728,000 shares (29.58%) have agreed to tender. That gets them almost 60% of the way towards their Tender Offer.But at ¥1050/share, the premium offered by this Tender Offer is a miserly 4%. And it wasn't a one-month or one-year high. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/119/083/original/Screenshot%202020-02-20%20at%205.24.18%20PM.png?1582191069" class="editor-image img-responsive" data-smartkarma-image-id="119083"></figure><div style="text-align: left;" class="content-caption">source: capitalIQ, Quiddity</div>This is an odd duck. Discussed below.

Yesterday there was an extremely brief announcement by an entity called ウプシロン投資事業有限責任組合 or Upsilon Investment Limited Partnership which itself is an entity of META Capital which is an investment firm owned by two former Japanese fixed income people who worked at foreign brokers in the early noughties (who share 75% ownership) and Idei Nobuyuki, former CEO of Sony (now 82yrs old), who owns 25%. The announcement was that the entity was launching a Tender Offer to buy 50.1% of Sawada Holdings (8699 JP) which is the former HIS Securities, which was before that HS Securities (renamed after Hideo Sawada, the entrepreneur and mover and shaker behind HIS Travel (now H I S Co Ltd (9603 JP)) purchased it closed to 20 years ago). The announcement said simply that it was launching a Tender Offer to start on 20 February, ending on 19 March (a 20 day period - the minimum). Sawada Holdings followed up this morning with an announcement containing the Upsilon announcement. The Tender is to buy 19,859,758 shares. Hideo Sawada owns 10,628,000 shares, or 26.81%. A company affiliated with him called 秀インター owns 1,100,000 shares or 2.77%. Together, those two entities with 11,728,000 shares (29.58%) have agreed to tender. That gets them almost 60% of the way towards their Tender Offer.But at ¥1050/share, the premium offered by this Tender Offer is a miserly 4%. And it wasn't a one-month or one-year high. source: capitalIQ, QuiddityThis is an odd duck. Discussed below.

Sawada Holdings Partial Tender - An Odd Duck

Japan

HS Holdings Co., Ltd. offers banking services. The Company provides deposits, loans, domestic settlement, fund management, and other services. HS Holdings also offers securities dealing, securities brokerage, securities underwriting, and other services.

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HS Holdings (8699 JP)

Sawada Withholds Opinion on TOB - Mongolia Deal Risk May Exist

This Tender Offer is still an odd duck.Today, Sawada Holdings (8699 JP) announced that after deliberations, the company's Board of Directors had...

Travis Lundy

Sawada Holdings Partial Tender - An Odd Duck

Yesterday there was an extremely brief announcement by an entity called ウプシロン投資事業有限責任組合 or Upsilon Investment Limited Partnership which itself is...

Travis Lundy

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