Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today post-close, <a href="https://www.smartkarma.com/entities/ryoyo-electro-corp" target="_blank" data-smartkarma-citation="entities:16757:1" rel="noopener">Ryoyo Electro (8068 JP)</a> and larger equity affiliate (20.1%) <a href="https://www.smartkarma.com/entities/ryosan-co-ltd" target="_blank" data-smartkarma-citation="entities:7795:1" rel="noopener">Ryosan Co Ltd (8140 JP)</a> announced their final Management Integration Plan (merger by holdco) after signalling a deal May23.</li>
<li>Activist-Ish-Y Silchester sold their stake in Ryosan to Ryoyo in February at a 20% premium. Activist Murakami-san had a top10 Ryosan stake end-March, went substantial 27 June, now owns 10%.</li>
<li>Both low-margin/ROE electronics traders have been subject to activist campaigns over the years. Both "survived". Now they are banding together to be a <em>bigger</em> independent low-margin electronics trader.</li>
</ul>


Today post-close, Ryoyo Electro (8068 JP) and larger equity affiliate (20.1%) Ryosan Co Ltd (8140 JP) announced their final Management Integration Plan (merger by holdco) after signalling a deal May23.
Activist-Ish-Y Silchester sold their stake in Ryosan to Ryoyo in February at a 20% premium. Activist Murakami-san had a top10 Ryosan stake end-March, went substantial 27 June, now owns 10%.
Both low-margin/ROE electronics traders have been subject to activist campaigns over the years. Both "survived". Now they are banding together to be a bigger independent low-margin electronics trader.


Ryoyo (8068) - Ryosan (8140): Recent and Former Activist Targets To Merge

Japan Experts, Extraordinary Performance, Astris Advisory Japan

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Equity Bottom-Up

Restar Holdings Corporation / Equity Bottom-Up

<ul><li><span style="font-size: var(--content-font-size);">Focus maintained on growth, experiencing temporary headwinds – Q1 FY3/2024 results showcased the company's strong execution in driving growth, with sales increasing by 6.2% YoY. </span></li><li><span style="font-size: var(--content-font-size);">Although there was a major improvement in profitability in the Environmental Energy segment, the core Semiconductor and Electronics Components experienced a negative of persistent demand weakness in China.</span></li><li><span style="font-size: var(--content-font-size);"> There was also reduced spot demand, negative FX translation impact YoY and on inventory valuation, and allowance for doubtful debt related to a key customer. </span></li></ul>

Focus maintained on growth, experiencing temporary headwinds – Q1 FY3/2024 results showcased the company's strong execution in driving growth, with sales increasing by 6.2% YoY. Although there was a major improvement in profitability in the Environmental Energy segment, the core Semiconductor and Electronics Components experienced a negative of persistent demand weakness in China. There was also reduced spot demand, negative FX translation impact YoY and on inventory valuation, and allowance for doubtful debt related to a key customer. 

Restar Holdings (3156) - Remaining on Course with Business Transformation

<div><div><div><div><ul><li>Restar is a semiconductor and electronic components trading company with a historical affiliation to Sony (6758) as an authorized dealer, catering to a diverse and global customer base.</li><li>In May 2023, it announced an ambitious and expansive strategic initiative for business reorganization.</li><li>These initiatives include organizational changes from a holding company to an operating company, structural reforms, making ROIC (Return on Invested Capital) a critical management key performance indicator (KPI), and creating growth opportunities targeting the automotive and industrial sectors. </li></ul></div></div></div></div>

Restar is a semiconductor and electronic components trading company with a historical affiliation to Sony (6758) as an authorized dealer, catering to a diverse and global customer base.In May 2023, it announced an ambitious and expansive strategic initiative for business reorganization.These initiatives include organizational changes from a holding company to an operating company, structural reforms, making ROIC (Return on Invested Capital) a critical management key performance indicator (KPI), and creating growth opportunities targeting the automotive and industrial sectors. 

Restar Holdings (3156) - Seeking Higher Returns Through Business Reorganization

<p>15 months ago, an electronics trading company called <a href="https://www.smartkarma.com/entities/ukc-holdings-corp" target="_blank" data-smartkarma-citation="entities:5466:1" rel="noopener">Restar Holdings Corporation (3156 JP)</a> (formerly UKC, which itself had been a target of well-known Japanese activist Murakami-san) made a <a href="http://www.kabupro.jp/edp/20190520/S100FSQA.pdf" target="_blank" rel="noopener">Large Shareholder Release</a> to the effect that it had purchased a 20.00% stake (a bit higher in terms of voting rights) in another semiconductor and electronics trading house <a href="https://www.smartkarma.com/entities/ryoyo-electro-corp" target="_blank" data-smartkarma-citation="entities:16757:1" rel="noopener">Ryoyo Electro (8068 JP)</a><em>"because we believe that by expanding our business area (especially system businesses), we can strengthen our lineup and customer strategy, and we expect synergies and innovative business."</em></p><p>Ryoyo <em>appears</em> to have been caught <a href="https://www.ryoyo.co.jp/info/ir/7460/" target="_blank" rel="noopener">unaware</a> on the 13th when Restar announced that its board had decided to purchase shares and did so the same day. It made it clear the attention was unsolicited and this was a hostile acquisition. </p><p>In March of last year, Ryoyo Electro upped its shareholder return policy, and this year it upped it further. Now it is going a step further.  </p><h2>The NEW News</h2><p>The new news is that <a href="https://www.smartkarma.com/entities/ryoyo-electro-corp" target="_blank" data-smartkarma-citation="entities:16757:1" rel="noopener">Ryoyo Electro (8068 JP)</a> will conduct a Tender Offer to buy back its shares and Restar has agreed to sell. This was announced yesterday along with <a href="https://www.ryoyo.co.jp/en/wenp/wp-content/uploads/2020/08/2020Q2_Financial-Review.pdf" target="_blank" rel="noopener">Q2 results</a>. </p><p>The <a href="https://www.ryoyo.co.jp/wryyp/wp-content/uploads/2020/08/ir301.pdf" target="_blank" rel="noopener">Tender Offer</a> (Japanese-only) is set at ¥2,990 which means Restar has made serious coin on its position of a year and change. The Tender Offer quantity is set at a maximum of 7,357,900 shares which is 5% more than the quantity Restar has agreed to sell. The purchase amount is ¥22 billion. There are some who would call this greenmail. Others, I am sure, will be kinder. </p><p>There is a trade here. Lots more below the fold. </p><p></p><div><p></p></div>

15 months ago, an electronics trading company called Restar Holdings Corporation (3156 JP) (formerly UKC, which itself had been a target of well-known Japanese activist Murakami-san) made a Large Shareholder Release to the effect that it had purchased a 20.00% stake (a bit higher in terms of voting rights) in another semiconductor and electronics trading house Ryoyo Electro (8068 JP)"because we believe that by expanding our business area (especially system businesses), we can strengthen our lineup and customer strategy, and we expect synergies and innovative business."Ryoyo appears to have been caught unaware on the 13th when Restar announced that its board had decided to purchase shares and did so the same day. It made it clear the attention was unsolicited and this was a hostile acquisition. In March of last year, Ryoyo Electro upped its shareholder return policy, and this year it upped it further. Now it is going a step further.  The NEW NewsThe new news is that Ryoyo Electro (8068 JP) will conduct a Tender Offer to buy back its shares and Restar has agreed to sell. This was announced yesterday along with Q2 results. The Tender Offer (Japanese-only) is set at ¥2,990 which means Restar has made serious coin on its position of a year and change. The Tender Offer quantity is set at a maximum of 7,357,900 shares which is 5% more than the quantity Restar has agreed to sell. The purchase amount is ¥22 billion. There are some who would call this greenmail. Others, I am sure, will be kinder. There is a trade here. Lots more below the fold. 

Ryoyo Electro Corporate Activism Ends in Buyout

Restar Holdings Corporation / Event-Driven

<p>Friday after the close, <a href="https://www.smartkarma.com/entities/563" target="_blank" data-smartkarma-citation="entities:563:1">Sony Corp (6758 JP)</a>-linked smallcap ($300-350mm each) semiconductor wholesalers <a href="https://www.smartkarma.com/entities/5466" target="_blank" data-smartkarma-citation="entities:5466:1">UKC Holdings (3156 JP)</a> and <a href="https://www.smartkarma.com/entities/7840" target="_blank" data-smartkarma-citation="entities:7840:1">Vitec Holdings (9957 JP)</a> announced they had agreed to merge as of April 1 2019, with UKC being the surviving entity. The UKC entity will spin off <em>its</em> device business to a Vitel sub called VGEL, and will become the parent holding company of three businesses - the integrated device business, the other UKC businesses, and the other Vitec businesses. The holding company will be renamed. Sony is the top shareholder (14.23%) at UKC and the second largest shareholder at Vitec (4.99%). </p><p>The ratio is 1:1 meaning it <em>appears</em> there is a 0.6% spread to be earned vs today's close but that spread doesn't exist. Details below.</p><p>This <em>appears</em> to be a straightforward merger of two smallcaps who look to survive in a competitive market and where they expect synergies from integrating their device businesses. </p><p>There <em>may</em> be more here than meets the eye.</p>

Friday after the close, Sony Corp (6758 JP)-linked smallcap ($300-350mm each) semiconductor wholesalers UKC Holdings (3156 JP) and Vitec Holdings (9957 JP) announced they had agreed to merge as of April 1 2019, with UKC being the surviving entity. The UKC entity will spin off its device business to a Vitel sub called VGEL, and will become the parent holding company of three businesses - the integrated device business, the other UKC businesses, and the other Vitec businesses. The holding company will be renamed. Sony is the top shareholder (14.23%) at UKC and the second largest shareholder at Vitec (4.99%). The ratio is 1:1 meaning it appears there is a 0.6% spread to be earned vs today's close but that spread doesn't exist. Details below.This appears to be a straightforward merger of two smallcaps who look to survive in a competitive market and where they expect synergies from integrating their device businesses. There may be more here than meets the eye.

UKC/Vitec Merger To Bring Murakami Gang Activism?

Japan

Restar Holdings Corporation is a holding company which manages operations for its subsidiaries.  Group companies wholesale semiconductors, electronic components and equipment.  UKC Holdings also designs semiconductors and software through its subsidiaries.

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Restar Holdings Corporation (3156 JP)

Ryoyo (8068) - Ryosan (8140): Recent and Former Activist Targets To Merge

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Travis Lundy

Restar Holdings (3156) - Remaining on Course with Business Transformation

Focus maintained on growth, experiencing temporary headwinds – Q1 FY3/2024 results showcased the company's strong execution in driving growth, with...

Astris Advisory Japan

Restar Holdings (3156) - Seeking Higher Returns Through Business Reorganization

Restar is a semiconductor and electronic components trading company with a historical affiliation to Sony (6758) as an authorized dealer, catering...

Astris Advisory Japan

Ryoyo Electro Corporate Activism Ends in Buyout

A Partial Tender Offer Stock Buyback. Japan treatment is special. Don't assume you would participate. It's technical.

Travis Lundy

UKC/Vitec Merger To Bring Murakami Gang Activism?

Friday after the close, Sony Corp (6758 JP)-linked smallcap ($300-350mm each) semiconductor wholesalers UKC Holdings (3156 JP) and Vitec Holdings...

Travis Lundy

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