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>The <a href="https://www.smartkarma.com/entities/soft99-corp" target="_blank" data-smartkarma-citation="entities:18486:1" rel="noopener">Soft99 Corp (4464 JP)</a> Board has, unsurprisingly, opposed the Effissimo offer for several reasons. Notably, they do address the huge price disparity between the two offers. </li>
<li>While most of the reasons to justify the opposition are weak, the Board unexpectedly notes that as of 24 September, the MBO retained acceptances to satisfy its minimum tendering condition. </li>
<li>Despite the significant premium of the Effissimo offer, this development suggests that the current acceptances for the MBO are sticky, thereby increasing the likelihood that Effissimo’s offer will fail. </li>
</ul>


The Soft99 Corp (4464 JP) Board has, unsurprisingly, opposed the Effissimo offer for several reasons. Notably, they do address the huge price disparity between the two offers. 
While most of the reasons to justify the opposition are weak, the Board unexpectedly notes that as of 24 September, the MBO retained acceptances to satisfy its minimum tendering condition. 
Despite the significant premium of the Effissimo offer, this development suggests that the current acceptances for the MBO are sticky, thereby increasing the likelihood that Effissimo’s offer will fail. 


Soft99 Corp (4464 JP): The Board Opposes Effissimo’s Hostile Offer and Hints the MBO Will Succeed

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Yesterday, <a href="https://www.smartkarma.com/entities/soft99-corp" target="_blank" data-smartkarma-citation="entities:18486:1" rel="noopener">Soft99 Corp (4464 JP)</a> announced a slight change in its "Target Opinion Document" after the MBO Bidco extended its TOB by 8 days the day before. </li>
<li>The detail was not in the MBO Bidco extension. It was just revealed in an added note on p3 of the Target Opinion. </li>
<li>That details matters A LOT to people looking at the Effissimo Overbid. The company's Board has some serious work ahead. </li>
</ul>


Yesterday, Soft99 Corp (4464 JP) announced a slight change in its "Target Opinion Document" after the MBO Bidco extended its TOB by 8 days the day before. 
The detail was not in the MBO Bidco extension. It was just revealed in an added note on p3 of the Target Opinion. 
That details matters A LOT to people looking at the Effissimo Overbid. The company's Board has some serious work ahead. 


[Japan M&A/Activism] The Nagging Little Detail In the Soft99 MBO Extension Target Doc

<ul>
<li>Effissimo has formally launched its hostile tender offer for <a href="https://www.smartkarma.com/entities/soft99-corp" target="_blank" data-smartkarma-citation="entities:18486:1" rel="noopener">Soft99 Corp (4464 JP)</a> at JPY4,100, which is 66.3% higher than the MBO price of JPY2,465. </li>
<li>The Board stonewalled Effissimo’s attempts to negotiate a friendly offer. The huge premium of Effissimo’s offer relies on lower WACC assumptions compared to the target/special committee IFA.</li>
<li>Management’s initial approach will be to rely on the Board to oppose the Effissimo offer. There is a good chance that Soft99 will remain listed with two large shareholders. </li>
</ul>


Effissimo has formally launched its hostile tender offer for Soft99 Corp (4464 JP) at JPY4,100, which is 66.3% higher than the MBO price of JPY2,465. 
The Board stonewalled Effissimo’s attempts to negotiate a friendly offer. The huge premium of Effissimo’s offer relies on lower WACC assumptions compared to the target/special committee IFA.
Management’s initial approach will be to rely on the Board to oppose the Effissimo offer. There is a good chance that Soft99 will remain listed with two large shareholders. 


Soft99 Corp (4464 JP): Effissimo Sheds More Light on Its Hostile Offer

<ul>
<li>In early August, the founder-family announced they would MBO the car care company <a href="https://www.smartkarma.com/entities/soft99-corp" target="_blank" data-smartkarma-citation="entities:18486:1" rel="noopener">Soft99 Corp (4464 JP)</a>. It was a very cheap MBO. Even 20% higher it would be cheap. </li>
<li>On Saturday, Kyodo, followed by various other media outlets, announced activist Effissimo Capital Management had announced a TOB to buy the company saying the MBO was "an extremely low level."</li>
<li>The <a href="https://www.nikkei.com/article/DGXZQOUF12A7D0S5A910C2000000/" target="_blank" rel="noopener">Nikkei-reported goal</a> would be "to protect the interests of minority shareholders while ensuring medium- to long-term increases in corporate value." This is REALLY BIG NEWS.</li>
</ul>


In early August, the founder-family announced they would MBO the car care company Soft99 Corp (4464 JP). It was a very cheap MBO. Even 20% higher it would be cheap. 
On Saturday, Kyodo, followed by various other media outlets, announced activist Effissimo Capital Management had announced a TOB to buy the company saying the MBO was "an extremely low level."
The Nikkei-reported goal would be "to protect the interests of minority shareholders while ensuring medium- to long-term increases in corporate value." This is REALLY BIG NEWS.


[Japan M&A/Activism] SOFT99 MBO Sees Activist EffissimoOverbid by 66%! Will This Set New Precedent?

<ul>
<li>On 12 September, <a href="https://www.47news.jp/13147153.html" target="_blank" rel="noopener">Kyodo News</a> reported that Effissimo Capital Management will launch a competing tender offer for <a href="https://www.smartkarma.com/entities/soft99-corp" target="_blank" data-smartkarma-citation="entities:18486:1" rel="noopener">Soft99 Corp (4464 JP)</a> at JPY4,100, 66.3% higher than the JPY2,465 MBO offer.</li>
<li>The Effissimo offer structure has been designed to shine an unflattering spotlight on the MBO low-ball offer and to prevent management from privatising Soft99.  </li>
<li>The management has several options to respond. The initial play will likely be to lean on the special committee to question the feasibility of the Effissimo bid. </li>
</ul>


On 12 September, Kyodo News reported that Effissimo Capital Management will launch a competing tender offer for Soft99 Corp (4464 JP) at JPY4,100, 66.3% higher than the JPY2,465 MBO offer.
The Effissimo offer structure has been designed to shine an unflattering spotlight on the MBO low-ball offer and to prevent management from privatising Soft99.  
The management has several options to respond. The initial play will likely be to lean on the special committee to question the feasibility of the Effissimo bid. 


Soft99 Corp (4464 JP): Shock and Awe as Effissimo Emerges with a Competing Offer

Japan

SOFT99 Corporation develops, manufactures, and markets automobile care products. The Company's products include car wash and wax products, chemical products for car maintenance and scratch repair, and house care products.

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Soft99 Corp (4464 JP)