Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Last night, Singapore-based fund Aslead Capital Pte announced that it would launch a Tender Offer on <a href="https://www.smartkarma.com/entities/fuji-kosan-company-ltd" target="_blank" data-smartkarma-citation="entities:17867:1" rel="noopener">Fuji Kosan Company (5009 JP)</a> to take at least a 40% stake and possibly full control after ownership and approaches did not lead to "satisfactory" measures to improve corporate value. </p>
<p>The shareholder had been acquiring shares since last year. It first went above 5% in August 2020 and until yesterday had most recently reported a 14.83% stake on 4 February. </p>
<p>The stock has an <em>interesting</em> set of investors, and was for many years in the early to mid-2010s a poster child for tiny cap deep value investment targets. </p>
<p>As of the announcement, Aslead states that it owns 16.8% which means to get to 40.0%, it needs only 23.2% of shares out - of the 83.2% it does not own. </p>
<p>The company has been building an 'interesting' set of shareholders and relationships. One activist sold last year to be replaced by another. There is someone infamous from the tabloids. This could be fun to watch. It will certainly trade through terms early. The question then is what next?</p>
<p>There is a behind-the-scenes link to the family office responsible for the single most fun <a href="https://www.smartkarma.com/messages/%20https:/y-n10.com/" target="_blank" rel="noopener">family office website</a> ever made (after you press enter, check on the left side to see the sound is on and if you need to read the text more smoothly switch from angled to vertical just above the sound on/off section). </p>

Last night, Singapore-based fund Aslead Capital Pte announced that it would launch a Tender Offer on Fuji Kosan Company (5009 JP) to take at least a 40% stake and possibly full control after ownership and approaches did not lead to "satisfactory" measures to improve corporate value. 
The shareholder had been acquiring shares since last year. It first went above 5% in August 2020 and until yesterday had most recently reported a 14.83% stake on 4 February. 
The stock has an interesting set of investors, and was for many years in the early to mid-2010s a poster child for tiny cap deep value investment targets. 
As of the announcement, Aslead states that it owns 16.8% which means to get to 40.0%, it needs only 23.2% of shares out - of the 83.2% it does not own. 
The company has been building an 'interesting' set of shareholders and relationships. One activist sold last year to be replaced by another. There is someone infamous from the tabloids. This could be fun to watch. It will certainly trade through terms early. The question then is what next?
There is a behind-the-scenes link to the family office responsible for the single most fun family office website ever made (after you press enter, check on the left side to see the sound is on and if you need to read the text more smoothly switch from angled to vertical just above the sound on/off section). 

Aslead Capital Hostile Offer for Fuji Kosan (5009)

<div><p>On 1 April, Strategic Capital <a href="https://proposal-for-wakita-from-sc-2021.com/wp/wp-content/uploads/2021/PR%28ENG%29.pdf" target="_blank" rel="noopener">announced</a> (English) in a press release that it had requested to put a matter on the agenda for the Annual General Meeting of <a href="https://www.smartkarma.com/entities/wakita-co-ltd" target="_blank" data-smartkarma-citation="entities:11924:1" rel="noopener">Wakita &amp; Co Ltd (8125 JP)</a> as was their right. </p></div><div><blockquote><p>The Fund and Strategic Capital are pleased to announce that, on March 30th, 2021, we notified WAKITA of our execution of the shareholders’ right to make a proposal at the annual shareholder meeting held in the coming May and confirmed that, on March 31st, 2021, WAKITA certainly received the documents of the proposal.</p></blockquote></div><div>
<p>There is a website with the catchy domain name <a href="https://proposal-for-wakita-from-sc-2021.com" target="_blank" rel="noopener">https://proposal-for-wakita-from-sc-2021.com</a>. The website has a <a href="https://proposal-for-wakita-from-sc-2021.com/wp/wp-content/uploads/2021/SC%20presentation%20Wakita.pdf" target="_blank" rel="noopener">presentation</a> (<a href="https://proposal-for-wakita-from-sc-2021.com/wp/wp-content/uploads/2021/SC%20presentation%20Wakita.pdf" target="_blank" rel="noopener">https://proposal-for-wakita-from-sc-2021.com/wp/wp-content/uploads/2021/SC%20presentation%20Wakita.pdf</a>) of two dozen pages which explains the issues clearly. </p>
<p>The <a href="https://proposal-for-wakita-from-sc-2021.com/wp/wp-content/uploads/2021/PR%28ENG%29.pdf" target="_blank" rel="noopener">letter</a> outlines the five shareholder proposals. Most of them were reasonable, and a perusal of the first insight in the series <a href="https://www.smartkarma.com/insights/japan-activism-a-look-into-wakita-8125-jp-potential-pre-event" target="_blank" data-smartkarma-citation="insights:50034" rel="noopener">Japan Activism: A Look into Wakita (8125 JP) Potential Pre-Event</a> shows why.</p>
<h3>The NEW News</h3>
<p>On Friday, the company <a href="https://contents.xj-storage.jp/xcontents/81250/a6125b97/fbfe/4961/baac/116bc18b2917/140120210423498992.pdf" target="_blank" rel="noopener">announced</a> that the Board recommended voting against all five shareholder proposals. </p>
<p>It is worthwhile re-reading the proposals and now the responses. They are disappointing, but it was never going to be otherwise. </p>
<p>Eventually, this company will have to change.  All it really takes is companies and shareholders doing right by themselves. </p>
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On 1 April, Strategic Capital announced (English) in a press release that it had requested to put a matter on the agenda for the Annual General Meeting of Wakita &amp; Co Ltd (8125 JP) as was their right. The Fund and Strategic Capital are pleased to announce that, on March 30th, 2021, we notified WAKITA of our execution of the shareholders’ right to make a proposal at the annual shareholder meeting held in the coming May and confirmed that, on March 31st, 2021, WAKITA certainly received the documents of the proposal.
There is a website with the catchy domain name https://proposal-for-wakita-from-sc-2021.com. The website has a presentation (https://proposal-for-wakita-from-sc-2021.com/wp/wp-content/uploads/2021/SC%20presentation%20Wakita.pdf) of two dozen pages which explains the issues clearly. 
The letter outlines the five shareholder proposals. Most of them were reasonable, and a perusal of the first insight in the series Japan Activism: A Look into Wakita (8125 JP) Potential Pre-Event shows why.
The NEW News
On Friday, the company announced that the Board recommended voting against all five shareholder proposals. 
It is worthwhile re-reading the proposals and now the responses. They are disappointing, but it was never going to be otherwise. 
Eventually, this company will have to change.  All it really takes is companies and shareholders doing right by themselves. 





Wakita Rejects StraCap's Shareholder Proposals

<p><a href="https://www.smartkarma.com/entities/wakita-co-ltd" target="_blank" data-smartkarma-citation="entities:11924:1" rel="noopener">Wakita &amp; Co Ltd (8125 JP)</a> has been a deep value stock for years. It has had deep value investors owning stakes before.</p><p>However, the company has pretty low ROE based on truly awful capital allocation policy. A very large portion of the long-term assets in the firm are effectively managed by people with little to no experience in the space, in a sub-optimal capital structure. The company has large amounts of net cash, and securities, and more securities and crossholdings. And the entire company is effectively a leasing business with some add-ons, and it finances itself with almost zero debt. </p><p>While it is dangerous to call a paradigm change on companies where there is a significant corporate cross-holding and significant family holding and control, there are times when the confluence of events make stocks like Wakita worth a deeper look.</p><p>This may be such a time.</p>

Wakita &amp; Co Ltd (8125 JP) has been a deep value stock for years. It has had deep value investors owning stakes before.However, the company has pretty low ROE based on truly awful capital allocation policy. A very large portion of the long-term assets in the firm are effectively managed by people with little to no experience in the space, in a sub-optimal capital structure. The company has large amounts of net cash, and securities, and more securities and crossholdings. And the entire company is effectively a leasing business with some add-ons, and it finances itself with almost zero debt. While it is dangerous to call a paradigm change on companies where there is a significant corporate cross-holding and significant family holding and control, there are times when the confluence of events make stocks like Wakita worth a deeper look.This may be such a time.

Japan Activism: A Look into Wakita (8125 JP) Potential Pre-Event

<p>Five Japanese companies announced ToSTNeT-3 Buybacks after the close of trading today: <a href="https://www.smartkarma.com/entities/1428" target="_blank" data-smartkarma-citation="entities:1428:1">Temp Holdings Co Ltd (2181 JP)</a> , <a href="https://www.smartkarma.com/entities/18275" target="_blank" data-smartkarma-citation="entities:18275:1">Nishio Rent All Co Ltd (9699 JP)</a> , <a href="https://www.smartkarma.com/entities/19446" target="_blank" data-smartkarma-citation="entities:19446:1">Sakata Inx Corp (4633 JP)</a> , <a href="https://www.smartkarma.com/entities/13233" target="_blank" data-smartkarma-citation="entities:13233:1">Toyo Ink Sc Holdings Co Ltd (4634 JP)</a> , and <a href="https://www.smartkarma.com/entities/3222" target="_blank" data-smartkarma-citation="entities:3222:1">Denkyosha Co Ltd (8144 JP)</a> . </p><p><em>If you have no cares in these names, please read no further. This is just a public service in case you do.</em></p><table class="table table-striped"><tbody>
<tr>
<td>Anncmt</td>
<td>Ticker</td>
<td>Company Name</td>
<td>MktCap</td>
<td>Shs To <br>Buy Back</td>
<td>% Shs <br>O/S</td>
<td>Price</td>
<td>Amount</td>
<td>
<p>If Complete,</p>
<p>Resulting TSY Shrs</p>
</td>
</tr>
<tr>
<td style="text-align: center;"><a href="https://www.release.tdnet.info/inbs/140120170220403231.pdf" target="_blank">❖</a></td>
<td>8144</td>
<td>Denkyosha</td>
<td style="text-align: right;">¥8.5bn</td>
<td style="text-align: right;">180,000</td>
<td style="text-align: right;">2.87%</td>
<td style="text-align: right;">¥1,278</td>
<td style="text-align: right;">¥0.23</td>
</tr>
</tbody></table>…

Five Japanese companies announced ToSTNeT-3 Buybacks after the close of trading today: Temp Holdings Co Ltd (2181 JP) , Nishio Rent All Co Ltd (9699 JP) , Sakata Inx Corp (4633 JP) , Toyo Ink Sc Holdings Co Ltd (4634 JP) , and Denkyosha Co Ltd (8144 JP) . If you have no cares in these names, please read no further. This is just a public service in case you do.

Anncmt
Ticker
Company Name
MktCap
Shs To  Buy Back
% Shs  O/S
Price
Amount

If Complete,
Resulting TSY Shrs



❖
8144
Denkyosha
¥8.5bn
180,000
2.87%
¥1,278
¥0.23

…

JAPAN BUYBACKS:  ToSTNeT-3 Buybacks for 2/21/2017

Japan

Wakita & Co., LTD. is a manufacturing and trading firm primarily handling construction and civil engineering equipment.  The Company also handles imported construction materials, industrial and commercial facilities, and audio-visual equipment.  Wakita leases construction machinery as well.

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Wakita & Co Ltd (8125 JP)

Aslead Capital Hostile Offer for Fuji Kosan (5009)

Fuji Kosan (5009) is the lastest smallcap value name to attract a hostile bidder putting a shot across the bow of recalcitrant management. A wake...

Travis Lundy

Wakita Rejects StraCap's Shareholder Proposals

Wakita has, unsurprisingly, rejected all of Strategic Capital's shareholder agenda items, recommending that shareholders vote against. Wholly...

Travis Lundy

Japan Activism: A Look into Wakita (8125 JP) Potential Pre-Event

Wakita (8125) is a serial underperformer, has a corporate governance and crossholder problem, an activist making noise, an inheritance stake to...

Travis Lundy

JAPAN BUYBACKS: ToSTNeT-3 Buybacks for 2/21/2017

Five Japanese companies announced ToSTNeT-3 Buybacks after the close of trading today: Temp Holdings Co Ltd (2181 JP) , Nishio Rent All Co Ltd...

Travis Lundy

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