Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>I tally 49 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma.</li>
<li>Five new deals discussed on Smartkarma this week: <a href="https://www.smartkarma.com/entities/smartpay-holdings-limited" target="_blank" data-smartkarma-citation="entities:45153:1" rel="noopener">SmartPay Holdings (SMP AU)</a>, <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data Corp (9613 JP)</a>, <a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">Zeekr (ZK US)</a>, <a href="https://www.smartkarma.com/entities/torii-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:3253:1" rel="noopener">Torii Pharmaceutical (4551 JP)</a>, and <a href="https://www.smartkarma.com/entities/mitsubishi-shokuhin-co-ltd" target="_blank" data-smartkarma-citation="entities:19778:1" rel="noopener">Mitsubishi Shokuhin (7451 JP)</a>.</li>
<li>Key updates/news took place on: <a href="https://www.smartkarma.com/entities/domain-holdings-australia-ltd" target="_blank" data-smartkarma-citation="entities:26033:1" rel="noopener">Domain Holdings Australia (DHG AU)</a>, <a href="https://www.smartkarma.com/entities/gold-road-resources-ltd" target="_blank" data-smartkarma-citation="entities:6698:1" rel="noopener">Gold Road Resources (GOR AU)</a>, <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>, <a href="https://www.smartkarma.com/entities/shibaura-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:12704:1" rel="noopener">Shibaura Electronics (6957 JP)</a>, <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a>.</li>
</ul>


I tally 49 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma.
Five new deals discussed on Smartkarma this week: SmartPay Holdings (SMP AU), NTT Data Corp (9613 JP), Zeekr (ZK US), Torii Pharmaceutical (4551 JP), and Mitsubishi Shokuhin (7451 JP).
Key updates/news took place on: Domain Holdings Australia (DHG AU), Gold Road Resources (GOR AU), Canvest Environmental Protection Group (1381 HK), Shibaura Electronics (6957 JP), Tsuruha Holdings (3391 JP).


(Mostly) Asia-Pac M&A: Torii Pharma, Mitsu. Shokuhin, Domain, Gold Road, Canvest, Shibaura, Tsuruha

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> is acquiring Torii Pharmaceutical, as well as the pharmaceutical business of Japan Tobacco and U.S. group company Akros Pharma (sub-subsidiary of Japan Tobacco) for ~¥160B.</li>
<li>With minimum overlap in focus areas, Shionogi believes that the transaction will create a leading company that delivers innovative pharmaceuticals. However, R&amp;D expenses of the combined company will remain elevated.</li>
<li>Considering the promising pipeline, we are hopeful on the long-term growth prospect of the combined company. Shionogi is scheduled to announce FY25 result on May 12.</li>
</ul>



Shionogi &amp; Co (4507 JP) is acquiring Torii Pharmaceutical, as well as the pharmaceutical business of Japan Tobacco and U.S. group company Akros Pharma (sub-subsidiary of Japan Tobacco) for ~¥160B.
With minimum overlap in focus areas, Shionogi believes that the transaction will create a leading company that delivers innovative pharmaceuticals. However, R&amp;D expenses of the combined company will remain elevated.
Considering the promising pipeline, we are hopeful on the long-term growth prospect of the combined company. Shionogi is scheduled to announce FY25 result on May 12.


Shionogi & Co (4507 JP): Torii Acquisition to Broaden Portfolio; High R&D to Dent Profitability

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/torii-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:3253:1" rel="noopener">Torii Pharmaceutical (4551 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> at JPY6,350 per share, a 13.8% premium to the last close.</li>
<li>Despite the lack of an auction and low takeover premium, the offer is attractive compared to historical trading ranges and peer multiples and represents an all-time high. </li>
<li>
<a href="https://www.smartkarma.com/entities/japan-tobacco-inc" target="_blank" data-smartkarma-citation="entities:13498:1" rel="noopener">Japan Tobacco (2914 JP)</a>, the controlling shareholder, has provided an irrevocable. The required minority acceptance rate is achievable as the offer is reasonable.  </li>
</ul>



Torii Pharmaceutical (4551 JP) has recommended a tender offer from Shionogi &amp; Co (4507 JP) at JPY6,350 per share, a 13.8% premium to the last close.
Despite the lack of an auction and low takeover premium, the offer is attractive compared to historical trading ranges and peer multiples and represents an all-time high. 

Japan Tobacco (2914 JP), the controlling shareholder, has provided an irrevocable. The required minority acceptance rate is achievable as the offer is reasonable.  


Torii Pharma (4551 JP): Shionogi & Co (4507 JP) JPY6,350 Tender Offer

Travis Lundy

<ul>
<li>Today after the close, <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> and <a href="https://www.smartkarma.com/entities/torii-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:3253:1" rel="noopener">Torii Pharmaceutical (4551 JP)</a> announced an agreed deal whereby Shionogi would launch a Tender Offer to take over Torii.</li>
<li>Torii Pharmaceutical shares rallied sharply after earnings so the actual TOB Price of ¥6,350/share is not a particularly high premium vs undisturbed. Valuation transparency is limited. Synergies are not included.</li>
<li>But the price is an ATH, the company is heavily de-levered (so a 23% premium to undisturbed is decent) and the minimum threshold is not high.</li>
</ul>


Today after the close, Shionogi &amp; Co (4507 JP) and Torii Pharmaceutical (4551 JP) announced an agreed deal whereby Shionogi would launch a Tender Offer to take over Torii.
Torii Pharmaceutical shares rallied sharply after earnings so the actual TOB Price of ¥6,350/share is not a particularly high premium vs undisturbed. Valuation transparency is limited. Synergies are not included.
But the price is an ATH, the company is heavily de-levered (so a 23% premium to undisturbed is decent) and the minimum threshold is not high.


[JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) - Split Price Deal on Weak Transparency

<ul>
<li>LIM Japan Event Master Fund sent a document to <a href="https://www.smartkarma.com/entities/torii-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:3253:1" rel="noopener">Torii Pharmaceutical (4551 JP)</a> requesting the company to distribute 100% of its surplus to shareholders and conduct a drastic share buyback.</li>
<li>LIM is of view that Torii has excess cash balances, which is more than the market cap of the company. Inefficient use of capital has led to low single-digit ROE.</li>
<li>Torii opposes the proposal, as the company thinks it needs adequate cash to pursue business development aka in-licensing of new drugs.  </li>
</ul>


LIM Japan Event Master Fund sent a document to Torii Pharmaceutical (4551 JP) requesting the company to distribute 100% of its surplus to shareholders and conduct a drastic share buyback.
LIM is of view that Torii has excess cash balances, which is more than the market cap of the company. Inefficient use of capital has led to low single-digit ROE.
Torii opposes the proposal, as the company thinks it needs adequate cash to pursue business development aka in-licensing of new drugs.  


Torii Pharmaceutical (4551 JP): Board Opposes Shareholder Proposal for Appropriation of Surplus

Japan

TORII PHARMACEUTICAL CO., LTD. produces and sells pharmaceuticals.  The Company promotes medical products of its parent company, Japan Tobacco. Torii Pharmaceutical operates building maintenance and management business as well as shipping business.

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Torii Pharmaceutical (4551 JP)

(Mostly) Asia-Pac M&A: Torii Pharma, Mitsu. Shokuhin, Domain, Gold Road, Canvest, Shibaura, Tsuruha

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...