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.

Event-Driven

<ul>
<li>Bain has <a href="https://www.baincapital.co.jp/sites/default/files/2024-10/BC_PR_29102024.pdf" target="_blank" rel="noopener">updated</a> its <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> tender documents, which mostly outline previously disclosed information. The update could be a prerequisite for Board recommendation. </li>
<li>Bain’s refusal to waive the precondition pushes the Board to recommend both offers. KKR seems uninterested in negotiations or bumping its offer but will have to concede on one.</li>
<li>The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or launches (KKR partners with Bain).</li>
</ul>


Bain has updated its Fuji Soft Inc (9749 JP) tender documents, which mostly outline previously disclosed information. The update could be a prerequisite for Board recommendation. 
Bain’s refusal to waive the precondition pushes the Board to recommend both offers. KKR seems uninterested in negotiations or bumping its offer but will have to concede on one.
The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or launches (KKR partners with Bain).


Fuji Soft (9749 JP): Bain Updates as the End Game Draws Closer

Nec Networks & System Integr / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks &amp; System Integr (1973 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC Corp (6701 JP)</a> at JPY3,250, 21.5% premium to the undisturbed price of JPY2,675 (28 October).</li>
<li>The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high. </li>
<li>While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal. </li>
</ul>



Nec Networks &amp; System Integr (1973 JP) has recommended a tender offer from NEC Corp (6701 JP) at JPY3,250, 21.5% premium to the undisturbed price of JPY2,675 (28 October).
The tender offer runs from 30 October to 11 December (30 business days), with payment commencing from 18 December. The offer represents an all-time high. 
While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal. 


NESIC (1973 JP): NEC (6701 JP)’s JPY3,250 Tender Offer

<ul>
<li>The <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> Board has maintained its recommendation of KKR’s first-stage tender offer. However, the recommendation was not unanimous, with four dissenting directors. </li>
<li>Bain’s likely next move is to waive the precondition and launch its offer. To bring KKR to the negotiating table, Bain will want to acquire as many shares as possible. </li>
<li>KKR’s first stage closes on 21 October. Success requires KKR to either work with Bain or match terms. As shares trade through Bain’s terms, there is little or no upside. </li>
</ul>


The Fuji Soft Inc (9749 JP) Board has maintained its recommendation of KKR’s first-stage tender offer. However, the recommendation was not unanimous, with four dissenting directors. 
Bain’s likely next move is to waive the precondition and launch its offer. To bring KKR to the negotiating table, Bain will want to acquire as many shares as possible. 
KKR’s first stage closes on 21 October. Success requires KKR to either work with Bain or match terms. As shares trade through Bain’s terms, there is little or no upside. 


Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside

<ul>
<li>
<a href="https://www.baincapital.co.jp/sites/default/files/2024-10/BC_PR11102024.pdf" target="_blank" rel="noopener">Bain’s pre-conditional tender offer</a> for <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> is JPY9,450, a 7.4% premium to KKR’s JPY8,800 offer. There is no minimum or maximum acceptance condition.</li>
<li>The preconditions relate to regulatory approval (Vietnam) and Board recommendation. Bain’s offer is designed to bring KKR to the negotiating table to find a solution to privatisation. </li>
<li>KKR can 1) do nothing, 2) work with Bain on a solution, or 3) engage in a price war to prevent the satisfaction of Bain’s Board recommendation precondition.</li>
</ul>



Bain’s pre-conditional tender offer for Fuji Soft Inc (9749 JP) is JPY9,450, a 7.4% premium to KKR’s JPY8,800 offer. There is no minimum or maximum acceptance condition.
The preconditions relate to regulatory approval (Vietnam) and Board recommendation. Bain’s offer is designed to bring KKR to the negotiating table to find a solution to privatisation. 
KKR can 1) do nothing, 2) work with Bain on a solution, or 3) engage in a price war to prevent the satisfaction of Bain’s Board recommendation precondition.


Fuji Soft (9749 JP): Bain’s Better Late than Never Competing Offer

<ul>
<li>The <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> Board has recommended KKR’s first tender offer (JPY8,800). The Board will announce its view on the second tender offer on launch. </li>
<li>The Board sounded out Bain’s progress on a binding proposal and 3D and Farallon's on their irrevocable. The absence of a Bain binding proposal immensely helped the Board’s decision.</li>
<li>Bain has likely left it too late. With a higher offer, Bain could force a recommendation change and hope KKR is shamed into cancelling 3D and Farallon's irrevocable. </li>
</ul>


The Fuji Soft Inc (9749 JP) Board has recommended KKR’s first tender offer (JPY8,800). The Board will announce its view on the second tender offer on launch. 
The Board sounded out Bain’s progress on a binding proposal and 3D and Farallon's on their irrevocable. The absence of a Bain binding proposal immensely helped the Board’s decision.
Bain has likely left it too late. With a higher offer, Bain could force a recommendation change and hope KKR is shamed into cancelling 3D and Farallon's irrevocable. 


Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers

Japan

SCSK Corporation provides a variety of IT services including system solutions, software development, and data center and communication network management. The Company sells packaged software and network equipment and develops software for distribution, manufacturing, and financial systems among others.  SCSK handles infrastructure software as well.

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Scsk Corp (9719 JP)

Fuji Soft (9749 JP): Bain Updates as the End Game Draws Closer

The final bid is likely Bain's offer, regardless of whether Bain walks (KKR needs to bump as significant volume has traded above its terms) or...

Arun George

NESIC (1973 JP): NEC (6701 JP)’s JPY3,250 Tender Offer

While below the midpoint IFA DCF range, the offer is attractive vs peer multiples and historical trading ranges. This is a done deal.

Arun George

Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside

Bain will likely waive the precondition to launch its offer. KKR will need to match terms to succeed. Another higher offer from Bain is unlikely as...

Arun George

Fuji Soft (9749 JP): Bain’s Better Late than Never Competing Offer

Bain’s offer is designed to bring KKR to the negotiating table. This could be the end game, but KKR is equally likely to match terms, making it...

Arun George

Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers

Bain’s dithering on a binding competing proposal left the Board little choice but to recommend the binding proposal at hand - the KKR offer. Bain...

Arun George

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