Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Recent news on the <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> situation includes better-than-expected possible sale of the SST business, a little headline fear-mongering on national security, and earnings.</li>
<li>Earnings this year will be volatile vs expectations. Timing (and magnitude) of kitchen-sinking matters. But neither ACT nor you should be buying it based on trough earnings expectations.</li>
<li>The call transcript is worth listening to. The math on the takeover maths well. This is a buy on dip. Again. </li>
</ul>


Recent news on the Seven &amp; I Holdings (3382 JP) situation includes better-than-expected possible sale of the SST business, a little headline fear-mongering on national security, and earnings.
Earnings this year will be volatile vs expectations. Timing (and magnitude) of kitchen-sinking matters. But neither ACT nor you should be buying it based on trough earnings expectations.
The call transcript is worth listening to. The math on the takeover maths well. This is a buy on dip. Again. 


7&I (3382 JP) - Dippity Doo Dah - Irrational Fears, Earnings Vol, But Restructuring Proceeding Apace

<ul>
<li>A Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-12-04/seven-i-60-billion-management-buyout-to-include-us-assets-ipo?srnd=homepage-asia" target="_blank" rel="noopener">article</a> late in the trading session today said the <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> MBO proposal by Ito family scion Ito Junro includes a US assets IPO.</li>
<li>The idea? IPO proceeds would help pay down MBO debt to Japanese banks. Seven &amp; i would retain a stake. This is not dissimilar to Berkshire Hathaway buying a stake.</li>
<li>But more directly, this leads us back to <a href="https://www.smartkarma.com/insights/7-i-3382-what-if-a-modest-proposal" target="_blank" data-smartkarma-citation="insights:166268" rel="noopener">7&amp;I (3382) - What If...  A Modest Proposal</a>. Possible strategic mistake by Ito-san here. ACT should act on this.</li>
</ul>


A Bloomberg article late in the trading session today said the Seven &amp; I Holdings (3382 JP) MBO proposal by Ito family scion Ito Junro includes a US assets IPO.
The idea? IPO proceeds would help pay down MBO debt to Japanese banks. Seven &amp; i would retain a stake. This is not dissimilar to Berkshire Hathaway buying a stake.
But more directly, this leads us back to 7&amp;I (3382) - What If...  A Modest Proposal. Possible strategic mistake by Ito-san here. ACT should act on this.


7&I (3382 JP) - Ito-San MBO Plan Includes 7-Eleven US IPO... Which LeadsTo A Modest Proposal

<ul>
<li>The sale process of <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> "unit" York Holdings, with 31 sub-units, has started. 7+ bidders bid in Round 1. Due dili follows then Round 2.</li>
<li>I expect SST+support ops get sold, and the specialty stores get carved out. I expect the deal to get decided by end-Feb 2025. Noises about real estate enhancement are encouraging.</li>
<li>This is still all to the good, so I include a Gratuitous Chart Showing 7&amp;i's Up-And-To-The-Rightness</li>
</ul>


The sale process of Seven &amp; I Holdings (3382 JP) "unit" York Holdings, with 31 sub-units, has started. 7+ bidders bid in Round 1. Due dili follows then Round 2.
I expect SST+support ops get sold, and the specialty stores get carved out. I expect the deal to get decided by end-Feb 2025. Noises about real estate enhancement are encouraging.
This is still all to the good, so I include a Gratuitous Chart Showing 7&amp;i's Up-And-To-The-Rightness


7 & I (3382) - York Holdings Sale Process, Timeline, Nuances

<ul>
<li>An <a href="https://bunshun.jp/denshiban/articles/b10138" target="_blank" rel="noopener">article</a> in Japanese weekly magazine <em>Bunshun </em>this morning sent shares in<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank-ltd" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> limit up +17% with a headline that NTT Docomo was interested to buy.</li>
<li>Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)</li>
<li>It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...</li>
</ul>


An article in Japanese weekly magazine Bunshun this morning sent shares inSBI Sumishin Net Bank (7163 JP) limit up +17% with a headline that NTT Docomo was interested to buy.
Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)
It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...


NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

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.

<ul>
<li>
<a href="https://www3.nhk.or.jp/news/html/20241127/k10014650591000.html" target="_blank" rel="noopener">NHK reports</a> that <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>'s first bidding round for a YORK Holdings stake ends on 28 November. The sale provides a third-party valuation benchmark for the asset. </li>
<li>It is an incremental positive for the founding family MBO as it supports the post-privatisation strategy and assists in securing bank financing.</li>
<li><span>This is an incremental negative for <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" rel="noopener">Alimentation Couche-Tard (ATD CN)</a> as it shows that the Board believes the restructuring plan will increase shareholder corporate value.  </span></li>
</ul>



NHK reports that Seven &amp; I Holdings (3382 JP)'s first bidding round for a YORK Holdings stake ends on 28 November. The sale provides a third-party valuation benchmark for the asset. 
It is an incremental positive for the founding family MBO as it supports the post-privatisation strategy and assists in securing bank financing.
This is an incremental negative for Alimentation Couche-Tard (ATD CN) as it shows that the Board believes the restructuring plan will increase shareholder corporate value.  


Seven & I Holdings (3382 JP): Implications from the YORK Holdings Stake Sale

Japan

Seven Bank, Ltd. provides banking services mainly through Automated Teller Machine (ATM) across Japan. The bank cooperates with affiliated financial institutions to establish the nationwide ATM network and provide remote banking services, including deposits and loans.

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Seven Bank Ltd (8410 JP)

7&I (3382 JP) - Dippity Doo Dah - Irrational Fears, Earnings Vol, But Restructuring Proceeding Apace

Seven & i has seen some recent headlines which should be good, but seem to be ignored. The market is concentrating on negative headlines, which are...

Travis Lundy

7&I (3382 JP) - Ito-San MBO Plan Includes 7-Eleven US IPO... Which LeadsTo A Modest Proposal

An article today said the Ito 7&i MBO proposal would IPO 7-11 US to pay buyout debt. A strategic error by Ito. An explicit admission of lack of...

Travis Lundy

7 & I (3382) - York Holdings Sale Process, Timeline, Nuances

An update with all the news fit to print on the York Holdings selldown, a proposed schedule and process/carveout. An idea of when we get price...

Travis Lundy

NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

A news weekly magazine Bunshun today had an article suggesting a bank executive thought NTT Docomo was on its way to buying SBI Sumishin Netbank....

Travis Lundy

Seven & I Holdings (3382 JP): Implications from the YORK Holdings Stake Sale

The accelerated timeline of the YORK Holdings stake sale is an incremental positive for the founding family MBO and another setback for Couche-Tard.

Arun George

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