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>Due to the delay in securing FEFTA approval, <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> has announced that the start of the MBK tender offer has been delayed to late June. </li>
<li>Makino is classified as a Type 3 company (core business), suggesting that MBK is negotiating undertakings to secure FEFTA approval.</li>
<li>Despite mitigating factors, the case for a bump is increasingly persuasive given peers' material reratings, Makino’s solid financial performance and lack of irrevocables.  </li>
</ul>


Due to the delay in securing FEFTA approval, Makino Milling Machine Co (6135 JP) has announced that the start of the MBK tender offer has been delayed to late June. 
Makino is classified as a Type 3 company (core business), suggesting that MBK is negotiating undertakings to secure FEFTA approval.
Despite mitigating factors, the case for a bump is increasingly persuasive given peers' material reratings, Makino’s solid financial performance and lack of irrevocables.  


Makino Milling Machine (6135 JP): Tender Delayed as the Case for a Bump Is Becoming Persuasive

<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> has announced that MBK has secured the two highest risk approvals (US CFIUS and China SAMR). </li>
<li>The remaining approval (Japan) should be obtained by mid-February. However, the offer must now contend with twin headwinds of a bull market and upgraded guidance. </li>
<li>While MBK’s improving deal economics support a bump, several mitigating factors (such as deal fatigue and no competing bid) suggest a low probability of a bump.   </li>
</ul>



Makino Milling Machine Co (6135 JP) has announced that MBK has secured the two highest risk approvals (US CFIUS and China SAMR). 
The remaining approval (Japan) should be obtained by mid-February. However, the offer must now contend with twin headwinds of a bull market and upgraded guidance. 
While MBK’s improving deal economics support a bump, several mitigating factors (such as deal fatigue and no competing bid) suggest a low probability of a bump.   


Makino Milling Machine (6135 JP): Twin Headwinds as Chinese and US Approvals Secured

<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

Japan

Sodick Co., Ltd. develops, manufactures, and sells electric machines and equipment.  The Company's product line includes computerized numerical control electrical discharge machine (EDM), super high precision wire cut EDM, CAD/CAM system for mold design and production, injection molding machine, and high speed manual drilling machine.

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Sodick Co Ltd (6143 JP)

Makino Milling Machine (6135 JP): Tender Delayed as the Case for a Bump Is Becoming Persuasive

FEFTA approval should be forthcoming. Despite mitigating factors, the case for a bump is increasingly persuasive given peers' material reratings,...

Arun George

Makino Milling Machine (6135 JP): Twin Headwinds as Chinese and US Approvals Secured

The precondition should be satisfied soon. While the re-rating of peers and upgraded guidance have improved MBK’s deal economics, several...

Arun George

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

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