IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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>On Friday, after market close, <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> finally issued a progress update on the MBK preconditional tender offer. The update, while mixed, should calm nerves. </li>
<li>The positive read-across is a pathway to regulatory approvals, the Homeplus saga has not derailed the offer, and the likely breach of the long-stop date is not a termination event.</li>
<li>The negative read-across is the lack of a revised tender start timeline, an unexplained delay in securing most regulatory approvals and ongoing uncertainty on the long-stop date.</li>
</ul>


On Friday, after market close, Makino Milling Machine Co (6135 JP) finally issued a progress update on the MBK preconditional tender offer. The update, while mixed, should calm nerves. 
The positive read-across is a pathway to regulatory approvals, the Homeplus saga has not derailed the offer, and the likely breach of the long-stop date is not a termination event.
The negative read-across is the lack of a revised tender start timeline, an unexplained delay in securing most regulatory approvals and ongoing uncertainty on the long-stop date.


Makino Milling Machine (6135 JP): Progress Update While Mixed, Should Calm Nerves

<ul>
<li>
<a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>’s pre-conditional tender offer from MBK Partners is at JPY11,751 per share. The gross spread has increased to 9.9% due to several concerns.</li>
<li>The wide gross spread reflects the risk in satisfying the precondition, the fallout from the Homeplus saga and breaching the long stop date (16 January 2026).</li>
<li>While these concerns have merit, there are mitigating factors. The risk/reward is favourable as the upside (9.9% spread) exceeds the downside (6.3% to my estimated deal break price). </li>
</ul>



Makino Milling Machine Co (6135 JP)’s pre-conditional tender offer from MBK Partners is at JPY11,751 per share. The gross spread has increased to 9.9% due to several concerns.
The wide gross spread reflects the risk in satisfying the precondition, the fallout from the Homeplus saga and breaching the long stop date (16 January 2026).
While these concerns have merit, there are mitigating factors. The risk/reward is favourable as the upside (9.9% spread) exceeds the downside (6.3% to my estimated deal break price). 


Makino Milling Machine (6135 JP): Tender Offer Risk/Reward

<ul>
<li>
<a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.</li>
<li>The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.</li>
<li>Despite the offer resulting from an auction, there remains a medium probability that <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> or a spurned white knight bidder (Candidate A) emerges with a higher offer.</li>
</ul>



Makino Milling Machine Co (6135 JP) announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.
The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.
Despite the offer resulting from an auction, there remains a medium probability that Nidec Corp (6594 JP) or a spurned white knight bidder (Candidate A) emerges with a higher offer.


Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> has launched its offer for <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> at an unchanged JPY11,000. The offer is open from 4 April to 21 May.</li>
<li>The offer was launched despite securing all regulatory approvals and the Board's postponement request. The launch could also be an attempt to thwart a competing proposal.</li>
<li>Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.</li>
</ul>



Nidec Corp (6594 JP) has launched its offer for Makino Milling Machine Co (6135 JP) at an unchanged JPY11,000. The offer is open from 4 April to 21 May.
The offer was launched despite securing all regulatory approvals and the Board's postponement request. The launch could also be an attempt to thwart a competing proposal.
Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.


Makino Milling Machine (6135 JP): Nidec Launches Its Offer

<ul>
<li>The <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> Board has proposed introducing countermeasures to nudge <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> to delay the start of the tender to 9 May. </li>
<li>The countermeasure was likely needed to facilitate a competing offer rather than force Nidec to provide the required information and delay the start (Nidec is still evaluating the request).</li>
<li>Nidec’s offer at current terms has a low chance of success, necessitating revised terms. The Board claims that there is a sufficient probability of a competing proposal.</li>
</ul>


The Makino Milling Machine Co (6135 JP) Board has proposed introducing countermeasures to nudge Nidec Corp (6594 JP) to delay the start of the tender to 9 May. 
The countermeasure was likely needed to facilitate a competing offer rather than force Nidec to provide the required information and delay the start (Nidec is still evaluating the request).
Nidec’s offer at current terms has a low chance of success, necessitating revised terms. The Board claims that there is a sufficient probability of a competing proposal.


Makino Milling Machine (6135 JP): Proposes Countermeasures

Japan

Shibaura Machine Co., Ltd. manufactures industrial machinery with molding machines and machine tools as mainline. The Company features a diverse product line with equipment such as semiconductor manufacturing machines, printing presses, control valves, precision machinery, industry robots, and machining centers (MCs). Shibaura Machine conducts businesses globally.

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Shibaura Machine (6104 JP)

Makino Milling Machine (6135 JP): Progress Update While Mixed, Should Calm Nerves

While the update is arguably mixed as it lends support to both the bulls and bears, it is positively skewed, which should calm nerves and narrow...

Arun George

Makino Milling Machine (6135 JP): Tender Offer Risk/Reward

The wide gross spread reflects three concerns. While these concerns have merit, there are mitigating factors. The risk/reward is favourable.

Arun George

Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

Despite the offer resulting from an auction, there remains a medium probability that Nidec or a spurned white knight bidder (Candidate A) emerges...

Arun George

Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high...

Arun George

Makino Milling Machine (6135 JP): Proposes Countermeasures

The Board proposes countermeasures to get Nidec to delay the start but is more likely to facilitate a competing offer. The probability of a bidding...

Arun George

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