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.

Equity Capital Markets

<ul>
<li>Since the announcement of the US$1.5 billion secondary offering, <a href="https://www.smartkarma.com/entities/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo (7974 JP)</a>’s shares have declined 3.5% to the undisturbed price of JPY8,995 per share (26 February).</li>
<li>It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Nintendo's share decline is lower than the median of recent large placements.</li>
<li>The offering will likely be priced on 9 March. The average large Japanese placement tends to generate positive returns.</li>
</ul>


Since the announcement of the US$1.5 billion secondary offering, Nintendo (7974 JP)’s shares have declined 3.5% to the undisturbed price of JPY8,995 per share (26 February).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Nintendo's share decline is lower than the median of recent large placements.
The offering will likely be priced on 9 March. The average large Japanese placement tends to generate positive returns.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo (7974 JP)</a> has announced a secondary offering of 32.7 million shares (37.6 million including overallotment), worth around US$1.8 billion (US$2.1 billion including overallotment).</li>
<li>There are four selling shareholders: Nomura Trust and Banking Co, Bank of Kyoto, <a href="https://www.smartkarma.com/entities/dena-co-ltd" target="_blank" data-smartkarma-citation="entities:747:1" rel="noopener">DeNA (2432 JP)</a>, and Resona Bank.</li>
<li>The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to JPY100 billion) will mitigate the impact.</li>
</ul>



Nintendo (7974 JP) has announced a secondary offering of 32.7 million shares (37.6 million including overallotment), worth around US$1.8 billion (US$2.1 billion including overallotment).
There are four selling shareholders: Nomura Trust and Banking Co, Bank of Kyoto, DeNA (2432 JP), and Resona Bank.
The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to JPY100 billion) will mitigate the impact.


Nintendo (7974 JP): A US$2.1 Billion Secondary Offering

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>This morning, <a href="https://www.smartkarma.com/entities/fuji-media-holdings-inc" target="_blank" data-smartkarma-citation="entities:3191:1" rel="noopener">Fuji Media Holdings (4676 JP)</a> bought back 61,213,800 shares (29.86% of TSO) in a ToSTNeT-3 buyback at ¥3,839 which was a tiny discount to end-Dec25 book value. </li>
<li>79mm shares were offered. Murakami+Dalton - the two major activists - owned 59mm shares. Another 20mm shares were offered in. That is an oddly large excess. Pro-ration ~76-77%.</li>
<li>That <em>may</em> leave activists with 10% of the new shares out. There's a lot of odd and interesting math to think about here. </li>
</ul>


This morning, Fuji Media Holdings (4676 JP) bought back 61,213,800 shares (29.86% of TSO) in a ToSTNeT-3 buyback at ¥3,839 which was a tiny discount to end-Dec25 book value. 
79mm shares were offered. Murakami+Dalton - the two major activists - owned 59mm shares. Another 20mm shares were offered in. That is an oddly large excess. Pro-ration ~76-77%.
That may leave activists with 10% of the new shares out. There's a lot of odd and interesting math to think about here. 


[Japan Activism?] Fuji Media (4676 JP) Buyback/Accretion Done, Now It's All About the Real Estate

Shin Etsu Chemical / Equity Capital Markets

<ul>
<li>Since the announcement of the US$1.0 billion secondary offering, <a href="https://www.smartkarma.com/entities/shin-etsu-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:4481:1" rel="noopener">Shin Etsu Chemical (4063 JP)</a>’s shares have declined 6.3% to the undisturbed price of JPY5,476 per share (27 January).</li>
<li>It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Shin Etsu's share decline is lower than the median of recent large placements.</li>
<li>The offering will likely be priced on 4 February. The average large Japanese placement tends to generate positive returns.</li>
</ul>


Since the announcement of the US$1.0 billion secondary offering, Shin Etsu Chemical (4063 JP)’s shares have declined 6.3% to the undisturbed price of JPY5,476 per share (27 January).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Shin Etsu's share decline is lower than the median of recent large placements.
The offering will likely be priced on 4 February. The average large Japanese placement tends to generate positive returns.


Shin Etsu Chemical (4063 JP): The Current Playbook

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kandenko-co-ltd" target="_blank" data-smartkarma-citation="entities:3726:1" rel="noopener">Kandenko Co Ltd (1942 JP)</a> has announced a secondary offering of 22.8 million shares (26.2 million including overallotment), worth around US$0.8 billion (US$1.0 billion including overallotment).</li>
<li>The timing is opportunistic as the shares are up 159% in the last 12 months. Notably, the placement was announced post-close after the full-year results were <a href="https://www.kandenko.co.jp/en/docs/3Notice%20of%20Revision%20to%20Financial%20Results%20and%20Dividend%20Forecasts.pdf" target="_blank" rel="noopener">upgraded intraday</a>.</li>
<li>The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to JPY30 billion) will partly mitigate the impact.</li>
</ul>



Kandenko Co Ltd (1942 JP) has announced a secondary offering of 22.8 million shares (26.2 million including overallotment), worth around US$0.8 billion (US$1.0 billion including overallotment).
The timing is opportunistic as the shares are up 159% in the last 12 months. Notably, the placement was announced post-close after the full-year results were upgraded intraday.
The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to JPY30 billion) will partly mitigate the impact.


Kandenko (1942 JP): A US$1.0 Billion Secondary Offering

Japan

TOEI ANIMATION CO., LTD. plans and produces animated cartoon movies.  The Company also grants broadcasting rights and licenses for other companies to produce and sell the animated characters' merchandise.  Toei Animation stages its own promotional shows and events to advertise movies.

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Toei Animation (4816 JP)

Nintendo (7974 JP): The Current Playbook

The offering, which was reduced due to the ToSTNeT-3 repurchase, will likely be priced on 9 March. The average large Japanese placement tends to...

Arun George

Nintendo (7974 JP): A US$2.1 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to...

Arun George

[Japan Activism?] Fuji Media (4676 JP) Buyback/Accretion Done, Now It's All About the Real Estate

Fuji Media HD did a bigly buyback this AM - 30% of TSO. Now it is about selling the real estate and cross-holdings and fixing media. It's cheap...

Travis Lundy

Shin Etsu Chemical (4063 JP): The Current Playbook

The offering will likely be priced on 4 February. The average large Japanese placement tends to generate positive returns.

Arun George

Kandenko (1942 JP): A US$1.0 Billion Secondary Offering

The timing of the placement after upgrading full-year forecasts will not be well-received. The offering as a percentage of out. shares and ADV are...

Arun George

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