Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Three years ago I wrote a <a href="https://www.smartkarma.com/insights/the-activism-at-tbs-there-s-a-history-and-there-is-new-activity-but-don-t-hold-your-breath" target="_blank" rel="noopener">piece</a> about the history of activism at <a href="https://www.smartkarma.com/entities/tokyo-broadcasting-system" target="_blank" data-smartkarma-citation="entities:12981:1" rel="noopener">Tokyo Broadcasting System (9401 JP)</a>, suggesting it was not expensive but activist gains might be hard won.</li>
<li>Yesterday, TBS announced it would sell strategic cross-holdings to raise cash for investment, as per its Medium-Term Management Plan 2023, and its full-year forecast Net Profit would rise 75%.</li>
<li>That tells you what you need to know, and it guides you to the value within. </li>
</ul>


Three years ago I wrote a piece about the history of activism at Tokyo Broadcasting System (9401 JP), suggesting it was not expensive but activist gains might be hard won.
Yesterday, TBS announced it would sell strategic cross-holdings to raise cash for investment, as per its Medium-Term Management Plan 2023, and its full-year forecast Net Profit would rise 75%.
That tells you what you need to know, and it guides you to the value within. 


TBS (9401) Selling Cross-Holdings But Don't Hold Your Breath

<ul>
<li>Recruit announced a buyback of up to 34 million shares in an own share tender offer to take place at a price below the current market price.</li>
<li>This kind of tender offer is almost always meant for Japanese corporate holders as it rarely makes sense for others to participate.</li>
<li>This is mildly EPS accretive, BVPS decretive, quite ROE accretive, but Recruit can't really use this method for the rest of its cross-holdings.</li>
</ul>


Recruit announced a buyback of up to 34 million shares in an own share tender offer to take place at a price below the current market price.
This kind of tender offer is almost always meant for Japanese corporate holders as it rarely makes sense for others to participate.
This is mildly EPS accretive, BVPS decretive, quite ROE accretive, but Recruit can't really use this method for the rest of its cross-holdings.


Thematic (Sector/Industry)

<ul>
<li>This is part of a series of M&amp;A guides that our Quiddity* <a href="https://www.smartkarma.com/companies/quiddity-advisors/team" target="_blank" rel="noopener">team</a> is publishing to aid investors in understanding the rules, parameters, possibilities, and processes in M&amp;A. </li>
<li>They are designed to contain links to all the relevant rules, oversight entities, and provide details as to how M&amp;A is conducted and what rules apply.</li>
<li>In many of the insights on deals in specific markets and countries, these insights will be used as points of reference. </li>
</ul>


This is part of a series of M&amp;A guides that our Quiddity* team is publishing to aid investors in understanding the rules, parameters, possibilities, and processes in M&amp;A. 
They are designed to contain links to all the relevant rules, oversight entities, and provide details as to how M&amp;A is conducted and what rules apply.
In many of the insights on deals in specific markets and countries, these insights will be used as points of reference. 


David Blennerhassett

<div>
<p><em>This week in StubWorld ...</em></p>
</div>
<div>
<ul>
<li>
<a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> outperforms as global carmakers face a chip shortage;</li>
<li>
<a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> increases its questionable stake in <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>; and</li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>'s ramps up its buybacks.</li>
</ul>
</div>
<hr>
<div>
<p>Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>


This week in StubWorld ...




Tokyo Electron (8035 JP) outperforms as global carmakers face a chip shortage;

Gulf Energy Development Public Company (GULF TB) increases its questionable stake in Intouch Holdings (INTUCH TB); and

Jardine Matheson Holdings (JM SP)'s ramps up its buybacks.




Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: TBS/Tokyo Electron, Intouch/Gulf, Jardines' Buybacks

<p>Last Friday, mid-cap specialist elevator maker (in the top ten globally) <a href="https://www.smartkarma.com/entities/fujitec-co-ltd" target="_blank" data-smartkarma-citation="entities:11686:1" rel="noopener">Fujitec Co Ltd (6406 JP)</a> announced a <a href="https://www.fujitec.com/common/fjhp/doc/top_global/document/irnews/2139/20201204_Fujitec%20Co.,%20Ltd.%20Announces%20Future%20Strategic%20Direction%20Plan.pdf" target="_blank" rel="noopener">Future Strategy Direction Plan</a> which focused on "priority business areas in the medium-and-long-term, the Company's medium- and long-term strategic targets, and measures aimed at strengthening its governance structure. </p><p>This <em>sounds</em> kind of jargon-y. Some of it certainly is. But there is actually more than that under the cover, and it is designed to mollify activists who have pursued the company for years. </p><p>The stock has hardly reacted. Some details clearly kick the can but there is a timer set for summer 2022. </p><p>More below the fold. </p>

Last Friday, mid-cap specialist elevator maker (in the top ten globally) Fujitec Co Ltd (6406 JP) announced a Future Strategy Direction Plan which focused on "priority business areas in the medium-and-long-term, the Company's medium- and long-term strategic targets, and measures aimed at strengthening its governance structure. This sounds kind of jargon-y. Some of it certainly is. But there is actually more than that under the cover, and it is designed to mollify activists who have pursued the company for years. The stock has hardly reacted. Some details clearly kick the can but there is a timer set for summer 2022. More below the fold. 

Activist Pressure FINALLY Works on Fujitec (6406)- Going Up? (Albeit Slowly)

Japan

TOKYO BROADCASTING SYSTEM HOLDINGS, INC. is a media company that broadcasts television and radio programs nationally.  The Company offers a variety of TV programs & film production, visual & music software production, and cable television programming.  Tokyo Broadcasting System provides digital satellite broadcasting services and also operates real estate business.

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Tokyo Broadcasting System (9401 JP)

TBS (9401) Selling Cross-Holdings But Don't Hold Your Breath

TBS has likely just sold a few to several hundred million dollars of crossholdings. But that is a one-off to finance investments. There is still no...

Travis Lundy

Recruit (6098) Buyback - Big, But Meh...

Recruit announced a buyback of up to 34 million shares in an own share tender offer to take place at a price near a 52-week low. Three major...

Travis Lundy

Quiddity Japan M&A Guide 2022

The 2022 version of the Quiddity Japan M&A Guide with the rules and regulations and practices surrounding Mergers and Acquisitions in Japan as they...

Travis Lundy

StubWorld: TBS/Tokyo Electron, Intouch/Gulf, Jardines' Buybacks

Tokyo Electron (8035 JP) outperforms as global carmakers face a chip shortage; Gulf Energy increases its questionable stake in Intouch; and Jardine...

David Blennerhassett

Activist Pressure FINALLY Works on Fujitec (6406)- Going Up? (Albeit Slowly)

Fujitec activist pressure finally seems to have shown results as the company buckles, and undertakes to pursue some activist demands. A small win....

Travis Lundy

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