Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Sembcorp Marine, AusNet, Shinsei Bank, MMC Corp

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

Japan requires retail developers to submit copious amounts of documentation to open any store over 1,000 sqm. In the past five years, there have been 2,505 applications for these larger developments, 750 of them anchored by drugstores, and more than 400 by <a href="https://www.smartkarma.com/entities/cosmos-pharmaceutical-corp" target="_blank" data-smartkarma-citation="entities:3797:1" rel="noopener">Cosmos Pharmaceutical (3349 JP)</a> alone. The figures show that it is drugstores that are expanding more than any other retail sector.

Japan requires retail developers to submit copious amounts of documentation to open any store over 1,000 sqm. In the past five years, there have been 2,505 applications for these larger developments, 750 of them anchored by drugstores, and more than 400 by Cosmos Pharmaceutical (3349 JP) alone. The figures show that it is drugstores that are expanding more than any other retail sector.

Drugstores Leads Large Store Openings in Japan Led by Cosmos Pharma


For the month of July, 13 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$34bn.



Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow-up discussions, or simply click on the insight link(s) below the name.







New Deals


Industry


Size (US$bn)


Type


Premium




Australia




5G Networks Ltd/Australia (5GN AU) /  Webcentral (WCG AU) 
Telco
0.1
Scheme
n.a.


Webcentral - 5GN Merger: A Small-Cap Merger Aimed at ASX300 Status



Australian Pharmaceutical Industries (API AU) 
Healthcare
0.5
Scheme
20.5%


API AU: The Hunter Turns The Hunted As Wesfarmers Makes A Move



Empired Ltd (EPD AU) 
Systems
0.2
Scheme
64.6%


Empired (EPD AU): Capgemini's Full Offer



iCar Asia Ltd (ICQ AU) 
Auto portal
0.2
Scheme
83%


ICar (ICQ AU): Carsome &amp; Catcha Carpool



Iress Ltd (IRE AU) 
Software
2.3
Scheme
23%


Iress (ASX AU) Bats Away EQT - For Now



Oil Search Ltd (OSH AU) 
O&amp;G
7.1
Scheme
12.3%


Santos/Oil Search: Getting Facts Straight



Rhipe Ltd (RHP AU) 
Software
0.1
Scheme
20%


Rhipe (RHP AU): Crayon Sees Silver in Them Thar Clouds



Spark Infrastructure (SKI AU) 
Utility
3.9
Scheme
26%



Spark Infra (SKI AU): KKR &amp; OTPPB's Tilts Falls Short
Spark Infrastructure (SKI AU): KKR &amp; OTPPB Pay Up




Sydney Airport (SYD AU) 
Airports
17.0
Scheme
42%


Sydney Airports (SYD AU): Opportunistic Tilt Amid Cloudy Future



Youfoodz Holdings (YFZ AU) 
Home delivery
0.1
Scheme
82.4%


Youfoodz (YFZ AU): HelloFresh's Lowball Takeover Offer Difficult to Block But Not UnBumbable



Hong Kong




Beijing Capital Land Ltd H (2868 HK) 
Real Estate
0.4
Merger by Absorption
62.8%


Beijing Capital Land (2868 HK): Delisting Offer From Parent



Nature Home Holding Company (2083 HK) 
Floorboarding
0.1
Scheme
17.2%


Nature Home (2083 HK): Possible Takeover Target Nature Home (2083 HK)'s Full Offer



South Korea




Green Cross Cell (031390 KS) / Green Cross LabCell (144510 KS) 
Biopharmaceutical
1.5
Merger
n.a.


GC Cell - GC LabCell: Korean Biopharma Merger Trading Tight


Source: Smartkarma Insights







The average premium for the new deals announced (or first discussed) in July was ~41%, with a year-to-date average of ~34% (102 deals &amp; total deal size of US$195bn). This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively. 
Offer Premium Summary

     




2019


2020


2021 YTD



Australia
33.0%
32.4%
35.2%


Hong Kong
25.2%
34.7%
34.5%


Japan
44.0%
35.2%
28.5%


ROW
29.1%
24.2%
35.3%


Average
31.5%
31.1%
33.5%


Source: Smartkarma Insights 







Summary of News in July of Arb Situations On Smartkarma's Radar



(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation)





Australia


Comments (with links to announcements &amp; insights)




Altium Ltd (ALU AU) 

20-Jul: Autodesk Inc (ADSK US)'s early June Offer for Altium Ltd (ALU AU) was terminated.




APN Property Group (APD AU) 

27-Jul: All resolutions passed at the Scheme Meeting




Bingo Industries (BIN AU) 

13-Jul: All resolutions passed at the Scheme Meeting




Boral Ltd (BLD AU) 

14-Jul:  Boral's Bump Earned, Likely to Extend, but THEN WHAT? 19-Jul: Boral (BLD AU): Index Impact from Seven's Offer 22-Jul: Boral Ltd: Seven's Done Deal. What Happens Next?
29-Jul: The Seven Group Holdings (SVW AU) Offer for Boral Ltd (BLD AU) was not extended (as announced on 28 Sep). The deal closed yesterday. The resulting ownership is now 69.6%. 




Crown Resorts (CWN AU) 

22-Jul: Star Entertainment Group (SGR AU) walks away from its proposal for Crown Resorts (CWN AU). That's not a good look. 




Galaxy Resources (GXY AU) 

7-Jul: Scheme Booklet dispatched. The Scheme Meeting will be held on the 6 August.




Hansen Technologies (HSN AU) 

16-Jul: Co-operation agreement entered into




Japara Healthcare (JHC AU) 

27-Jul: Japara Healthcare (JHC): Calvary Takes Charge




Mainstream Group Holdings Ltd (MAI AU) 
No July update



Milton Corp Ltd (MLT AU) 

21-Jul: Milton's Marvelous Arb Meanders Along... Marvelously




Think Childcare (TNK AU) 

No July update












Hong Kong


Comments (with links to announcements &amp; insights)




Bestway Global Holding (3358 HK) 

16-Jul: Scheme Doc pushed out to the 31 August. 




China Machinery Engineering (1829 HK) 

6-Jul: CMEC (1829 HK): Circ Out. H-Class Meeting Firmed. Looks Done




China Traditional Chinese Medicine (570 HK) 

9-Jul: In its monthly update regarding a potential Offer, China Traditional Chinese Medicine (570 HK) says there is no update.




China Youzan Limited (8083 HK) 

15-Jul: In its monthly update, China Youzan (8083 HK) said in its monthly update, that there is no update.




Chong Hing Bank (1111 HK) 

30-Jul: Chong Hing Bank (1111 HK): Scheme Doc Out. IFA Says Fair



Kerry Logistics Network (636 HK)
20-Jul: Kerry Logistics Network (636 HK) announced approval by the Independent Shareholders in respect of the Special Deal Agreements and the Framework Services Agreement had been obtained.



Rivera Holdings (281 HK) 

23-Jul: Scheme approved. 




Sichuan Languang Justbon Service (2606 HK) 

15-Jul: Desliting conditions met. Last day of trading is the 9 August. 




Soho China Ltd (410 HK) 

2-Jul: SOHO China (410 HK): Known Knowns As Spread Widens 30-Jul: SOHO China (410 HK): In For a Penny .... 




WH Group (288 HK) 

5-Jul: WH Group - Trading Opportunities Abound 10-Jul: WH Group - Long-Only Fundamental Investors Can Take Advantage Too 30-Jul: WH Group Offer Doc Out - This Little Piggy Went To Market.










India


Comments (with links to insights)




Adani Power (ADANI IN) 

23- Jul: After going limit up today, to INR 101.80/share, Adani Power (ADANI IN) is now back above INR 100/share after having fallen from INR 160. The 1-year deadline to file the Delisting Offer to the Exchange is 23 July. The Exchange would respond within 5 business days if they file. 




Mphasis Ltd (MPHL IN) 

No July update




Vedanta Ltd (VEDL IN) 

No July update









Japan


Comments (with links to announcements &amp; insights)




Aomori Bank (8342 JP) / Michinoku Bank (8350 JP) 
No July update


EPS Holdings (4282 JP)
9-Jul: The bidder for EPS Holdings (4282 JP) now has 86.97%. This will lead us to an EGM and a squeezeout. 



Hitachi Metals (5486 JP) 

No July update




Invesco Office J Reit (3298 JP) 

28-Jul: Invesco Real Estate Deal for Invesco Office (3298) Successful - Now For the Aftermath



Japan Asia (3751 JP)
14-Jul: City Index Eleventh has raised its bid from ¥960/share to ¥970/share. That forces an extension from expected end date tomorrow to the 30th of July. That's why it was raised. He doesn't have enough shares to do what he wants yet. But in raising it, he has gotten the board to agree to recommend his offer, which is something pretty special. 



Locoguide (4497 JP) / Kufu (4399 JP)

9-Jul: Kufu (4399 JP) confirmed on 7th July 2021 that shareholders have voted in favour of the Deal. Locoguide (4497 JP) shareholder vote (which was quite straightforward as the top shareholder held more than two-thirds) was also confirmed on 25th June 2021. Both stocks are expected to be delisted on 29th September 2021. The combined NewCo will be listed on 1st October 2021. 



Maruka Machinery (7594 JP) / Furusato Industries (8087 JP) 
No July update



Oliver Corp (7959 JP) 
No July update



Sakai Ovex (3408 JP) 
27-Jul: Sakai Ovex MBO Reloaded - Up 27% from Last Weak Bump But Still Cheap




Sanshin Electronics (8150 JP) 
No July update



Sawada Holdings (8699 JP) 

3-Jul: Sawada (8699) - Upsilon To End Its Tender, and Khan Bank Applies to List




Secom Co Ltd (9735 JP) 

No July update




Takeei Corp (2151 JP) 

8-Jul: Takeei (2151 JP) - Rever (5690 JP): Shareholder Approvals Complete - Road to TOPIX Upweight Clear




Toshiba Corp (6502 JP) 

20-Jul: Toshiba Corp (6502 JP) Chapter 5: Assessing the Next Move 21-Jul: Toshiba Support Cracked




Yamada Denki (9831 JP) 

No July update












Malaysia


Comments 




IHH Healthcare (IHH MK) 
No July update



Ijm Plantations (IJMP MK) 
No July update



MMC Corp Bhd (MMC MK) 
14-Jul: the Offeror has granted the Company an extension of time to no later than 5.00pm on 30 August 2021 for the Company to respond to the Offeror with its decision as to whether or not to implement and to recommend the Proposed SCR to the Entitled Shareholders for their consideration, based on the terms set out in the SCR Offer Letter.









New Zealand


Comments (&amp; link to insight)




Tilt Renewables Ltd (TLT NZ) 

15-Jul: At the Scheme Meeting,  shareholders representing 91.84% of all Tilt Renewables' shares on issue, voted by proxy or at the meeting. Over 75% of the votes of shareholders in each interest class who were entitled to vote and who voted, were cast in favour of the Scheme. Further, of all the votes cast, 99.94% of votes were in favour of the Scheme.








Singapore


Comments (&amp; link to insight)




Dutech Holdings (DTECH SP) 

15-Jul: Offer price revised to $0.435/share. Offer closes on the 2 August.







For the month of June, 11 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14.8bn.



Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow-up discussions, or simply click on the insight link(s) below the name.






New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Altium Ltd (ALU AU) 
Software
3.7
Scheme
41.5%


Altium Ltd (ALU) Rebuffs Autodesk Offer



Hansen Technologies (HSN AU) 
Software
1.0
Scheme
25.0%


Hansen Technologies (HSN AU)'s Assured Deal With BGH



Milton Corp Ltd (MLT AU) 
Fund manager
3.1
Scheme
20.0%



WHSP's Proposed Merger With Milton Corp Milton Merger Is A Most Marvelous Arb Milton-WHSP Merger Index Implications and the Marvelous Arb



 



Hong Kong




Bestway Global Holding (3358 HK) 
Leisure products
0.1
Scheme
27.0%


Bestway Global (3358 HK): Scheme Proposal From Founder



Soho China Ltd (410 HK) 
Real estate
3.3
VGO
31.6%


SOHO China (410 HK) Suspended Pursuant To The Takeovers Code - Again SOHO China's (410 HK) Done &amp; Dusted VGO



WH Group (288 HK) 
Meat supplier
0.5
Buyback/Partial



WH Group (288 HK): Today's Pig Is Tomorrow's Bacon?  WH Group Buyback Offer Announced - Strong Accretion Creates Accretion Risk  WH Group Vs Peers - Too Many Piggies Going to Market?






Japan




Oliver Corp (7959 JP) 
Designer
0.1
Tender Offer
39.0%


Oliver (7959 JP) MBO - Please Sir, I Want Some More!



Sanshin Electronics (8150 JP) 
Electronics
1.5
Buyback Tender



Sanshin Electronics (8150 JP) BIG Buyback Tender - Not Designed For You










Malaysia




Ijm Plantations (IJMP MK) 
Palm Oil
0.7
SPA/MGO
56.19%


IJM Plantations' Potential MGO From KLK







MMC Corp Bhd (MMC MK) 
Infrastructure
0.7
SCR
70.94%


MMC Corp (MMC MK): Privatisation Offer From Syed Mokhtar  MMC Corp (MMC MK): Let's Talk About Timing










Singapore




Dutech Holdings (DTECH SP) 
Security 
0.1
Cash Offer
60.0%


Dutech Holdings (DTECH SP): A Safe Bet


Source: Smartkarma Insights






The average premium for the new deals announced (or first discussed) in June was ~41%, with a year-to-date average of ~32% (89 deals &amp; total deal size of US$161bn). This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively. 




Summary of News in June of Arb Situations On Smartkarma's Radar



(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation)






Australia


Comments (with links to announcements &amp; insights)




APN Property Group (APD AU) 

16-Jun: APN Property (APD AU): Scheme Booklet Out. EGM Firmed




Asaleo Care Ltd (AHY AU) 

2-Jun: Asaleo (ASX: AHY): Essity’s Offer Gets Up




Bingo Industries (BIN AU) 

9-Jun: Bingo Industries (BIN AU)'s Scheme Booklet has been registered with ASIC. 
The board unanimously recommends MIRA's Offer. The Independent Expert also gives the thumbs up. The Scheme Meeting will take place on the 13 July with an expected implementation date of 5 August. 14-Jun: Bingo Industries (BIN AU): Scheme Booklet Out. EGM Tabled




Boral Ltd (BLD AU) 

4-Jun: Boral Ltd (BLD AU)'s Target Statement is expected to be released next week in response to Seven Group Holdings (SVW AU) Offer.   9-Jun: Not surprisingly, in the Target Statement,  Boral Ltd (BLD AU) has recommended shareholders reject Seven Group Holdings (SVW AU)'s Offer.  28-Jun: Boral Ltd (BLD AU) Rejects Seven's Bump




Crown Resorts (CWN AU) 

15-Jun: Crown Resorts (CWN AU): Oaktree's Intriguing Proposal




Galaxy Resources (GXY AU) 

No June update




Japara Healthcare (JHC AU) 

15-Jun: Japara Healthcare (JHC AU): Bolton Clarke Spoils Calvary's Charge




Mainstream Group Holdings Ltd (MAI AU) 

9-Jun: Mainstream (MAI AU): Apex on Top Again as Bidding War Continues.... 21-June: Mainstream Group Holdings Ltd (MAI AU) confirmed that SS&amp;C did not exercise their matching rights. Consequently, they are now in discussions with Apex. Apex's Offer was at A$2.80/share.  25-Jun: Mainstream Group Holdings Ltd (MAI AU) has confirmed that they have entered into a Scheme Implementation Deed with Apex. The Offer Price is A$2.80/share.




McPherson's Ltd (MCP AU) 

15-Jun: Arrotex walks - and McPherson's Ltd (MCP AU) tanks 15.22%




Mortgage Choice (MOC AU) 

No June update



Primewest Group Ltd (PWG AU)

3-Jun: Primewest (PWG AU): Centuria Offer Period Extended; Trading Wide 4-Jun: This Offer is now unconditional.




Think Childcare (TNK AU) 

No June update




Vitalharvest Freehold Trust (VTH AU) 

28-Jun: Vitalharvest Freehold Trust (VTH AU)'s shareholders approve MAFM's Scheme. 




Vocus Communications (VOC AU) 

22-Jun: Vocus Communications (VOC AU)'s shareholders overwhelmingly approve MIRA's Scheme.










Hong Kong


Comments (with links to announcements &amp; insights)




China Machinery Engineering (1829 HK) 

4-Jun:  CMEC (1829 HK): Clarity On Timing As Pre-Cons Fulfilled




China Traditional Chinese Medicine (570 HK) 

8-Jun: In its monthly update regarding a potential Offer, China Traditional Chinese Medicine (570 HK) says there is no update.




China Youzan Limited (8083 HK) 

18-Jun: China Youzan (8083 HK) has now extends the Scheme long stop date out to the 26 November 2021. 




Chong Hing Bank (1111 HK) 

8-Jun: As expected, Chong Hing Bank (1111 HK) delays the Scheme Doc to the 9 July. I had the 17 July in my indicative table  18-Jun: Chong Hing Bank (1111 HK) announced it has now pushed back the despatch of the Scheme Document to the 30 July, around two weeks past my prior estimate. 




Kerry Logistics Network (636 HK) 

7-Jun: The free float waiver has been received.  A bunch of other pre-cons still remain outstanding.  15-Jun: Shareholders of Kerry Logistics Network (636 HK) approve the partial Offer. Various pre-conditions have yet to be fulfilled.  29-Jun: CFIUS approval received. Various pre-conditions remain outstanding. 




Rivera Holdings (281 HK) 

30-Jun: Scheme Doc out. Scheme Meeting is the 23 July. Payment expected on the 30 August. 




Sichuan Languang Justbon Service Group (2606 HK) 

17-Jun: EGM gets up. Close of acceptances on the 2 July. This is done.










India


Comments (with links to insights)




Adani Power (ADANI IN) 

3-Jun: Not Much Time Left for Adani Power Delisting Offer




Mphasis Ltd (MPHL IN) 

No June update




Vedanta Ltd (VEDL IN) 

20-Jun: VEDL has continued to outperform peers while VEDL has underperformed HZL so the VEDL stub has underperformed. 










Japan


Comments (with links to announcements &amp; insights)




Aomori Bank (8342 JP) / Michinoku Bank (8350 JP) 
No June update



BeNEXT Group (2154 JP) 
No June update



EPS Holdings (4282 JP) 
1-Jun:  EPS MBO Is Cheap. Too Cheap. But Be Careful Of Your Assumptions




Fuji Kosan Company (5009 JP) 
15-Jun: Tender offer extended to the 9 July 25-Jun: Fuji Kosan Wins In Court, Aslead Walks Away




Hitachi Metals (5486 JP) 

No June update




Honshu Chemical Industry (4115 JP) 

14-Jun: The Tender Offer for Honshu Chemical Industry (4115 JP) was completed. The owners now control 84.6%.




Invesco Office J Reit (3298 JP) 

1-Jun: Starwood Bumps Invesco Office Price to Match But STILL Not a Done Deal. 11-Jun:  Invesco Real Estate Bumps Intended Tender Offer Price 16-Jun: Starwood Tender for Invesco Fails - Invesco Deal More Likely To Work But....  17-Jun: Invesco Real Estate have announced their Tender Offer for Invesco Office J Reit (3298 JP) from June 18 to July 27. JPY 22,750/share. If you own, now is the time to sell. 



Japan Asia (3751 JP)
15-Jun: CIE Boosts Its Japan Asia Group (3751) TOB Price - Hidden Implications




Locoguide (4497 JP) / Kufu (4399 JP)

No June update



Maruka Machinery (7594 JP) / Furusato Industries (8087 JP) 
No June update



Sawada Holdings (8699 JP) 

23-Jun: Sawada Holdings (8699 JP)announced that after Khan Bank applied to the Mongolian Central Bank in February for permission to pay a dividend for the year ended 31/12/2020, the MCB had responded on 18 June and so the company will receive a dividend of JPY 4.41bn and record it as operating revenue in the current fiscal year. IN ADDITION, Sawada announced that the MCB had asked for confirmation and documentation on the selldown by a Qualifying Shareholder. This was Tower. Tower sold. Tower reported they had sold. This should be open and shut.  In the meantime, J Trust Co Ltd (8508 JP) has 14.39% of Sawada. See the link.




Secom Co Ltd (9735 JP) 

1-Jun: The Tender Offer filing for Secom Co Ltd (9735 JP)'s tender offer for Secom Joshinetsu (4342 JP) was filed on 31 May.




Toshiba Corp (6502 JP) 

7-Jun: Toshiba Shareholder Return - A Little of This, A Little of That, But Sticky and Accretive 10-Jun: Toshiba's 2020 AGM Investigative Report Is Damning 11-Jun: Toshiba – Hands in the Cookie Jar 13-Jun: With Directors Under Fire, Toshiba Axes Two, May Need Another EGM 18-Jun: Toshiba – Who Should Stay and Who Should Go 22-Jun: Toshiba – A Tale of Two Investigative Reports 24-Jun: How Much of Toshiba Is Owned By "Activists"? The Answer 25-Jun: Toshiba Board in Disarray! Likely Need ANOTHER EGM 28-Jun: Toshiba – The Fallout




Yamada Denki (9831 JP) 

9-Jun: Yamada Denki and Otsuka Kagu Do The Deed - A Quick Merger









Malaysia


Comments 




Can-One Bhd (CAN MK) 
15-Jun: Offer closed on the 15 June.



IHH Healthcare (IHH MK) 
No June update











New Zealand


Comments (&amp; link to insight)




Tilt Renewables Ltd (TLT NZ) 

13-Jun: Tilt Renewables: Scheme Booklet Out. EGM Firmed










Travis Lundy

<a href="https://www.smartkarma.com/entities/otsuka-kagu-ltd" target="_blank" data-smartkarma-citation="entities:5139:1" rel="noopener">Otsuka Kagu Ltd (8186 JP)</a> had cash problems in 2019 which required a saviour. <a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a> stepped in as that saviour, injecting cash and buying shares, leaving Kumiko Otsuka in charge of the previous family battleground company.As <a href="https://www.smartkarma.com/profiles/michael-causton" target="_blank" data-smartkarma-citation="accounts:2415" rel="noopener">Michael Causton</a> wrote six months ago in <a href="https://www.smartkarma.com/insights/otsuka-kagu-to-be-absorbed-by-yamada-denki-as-family-ceo-departs" target="_blank" data-smartkarma-citation="insights:46202" rel="noopener">Otsuka Kagu to Be Absorbed by Yamada Denki as Family CEO Departs</a>, that family control did not last as the recovery and rebound did not work as well as it might have, despite the substantial rebound in furniture sales in the WFH era.  Back then, Michael said, <blockquote>The departure of the founding family signals that Otsuka will likely become a wholly owned subsidiary sooner rather than later. On acquisition, Yamada provided a large cash injection to help with the chain’s operations, but with Otsuka having sold off most of its major assets, reducing fixed assets to just ¥164 million compared to ¥3.1 billion in 2010, and with sales still only growing slowly, it now looks as if Yamada will need to inject even more. Delisting the company and taking over complete control of strategy and operations is the only option left.</blockquote>That was prescient. Today, Yamada Denki and Otsuka Kagu <a href="https://www.yamada-holdings.jp/lang-en/pdf/press/210609_1_en.pdf" target="_blank" rel="noopener">announced</a> plans to merge. The Otsuka Kagu shareholder meeting is in 7 weeks (record date was 30 April), and the merger is scheduled to be effective in 12 weeks. A foreshortened timeframe on an 'easy' smallcap deal.

Otsuka Kagu Ltd (8186 JP) had cash problems in 2019 which required a saviour. Yamada Denki (9831 JP) stepped in as that saviour, injecting cash and buying shares, leaving Kumiko Otsuka in charge of the previous family battleground company.As Michael Causton wrote six months ago in Otsuka Kagu to Be Absorbed by Yamada Denki as Family CEO Departs, that family control did not last as the recovery and rebound did not work as well as it might have, despite the substantial rebound in furniture sales in the WFH era.  Back then, Michael said, The departure of the founding family signals that Otsuka will likely become a wholly owned subsidiary sooner rather than later. On acquisition, Yamada provided a large cash injection to help with the chain’s operations, but with Otsuka having sold off most of its major assets, reducing fixed assets to just ¥164 million compared to ¥3.1 billion in 2010, and with sales still only growing slowly, it now looks as if Yamada will need to inject even more. Delisting the company and taking over complete control of strategy and operations is the only option left.That was prescient. Today, Yamada Denki and Otsuka Kagu announced plans to merge. The Otsuka Kagu shareholder meeting is in 7 weeks (record date was 30 April), and the merger is scheduled to be effective in 12 weeks. A foreshortened timeframe on an 'easy' smallcap deal. 

Yamada Denki and Otsuka Kagu Do The Deed - A Quick Merger

Japan

Yamada Holdings Co., Ltd. operates as a holding company. The Company, through its subsidiaries, sells home appliances and offers various services for housing, furniture and interior, remodeling, real estate, insurance, finance, and others. Yamada Holdings provides its services throughout Japan.

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Yamada Holdings (9831 JP)

Last Week in Event SPACE: Sembcorp Marine, AusNet, Shinsei Bank, MMC Corp

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Drugstores Leads Large Store Openings in Japan Led by Cosmos Pharma

Some analysts think the drugstore sector in Japan is saturated. As the latest govt. data shows, the sector has led in large store expansion in the...

Michael Causton

(Mostly) Asia M&A: July 2021 Roundup

The average premium for new deals announced (or first discussed) in July was ~41%, with a YTD average of ~34%. This compares to the average premium...

David Blennerhassett

(Mostly) Asia M&A: June 2021 Roundup

The average premium for the new deals announced (or first discussed) in June was ~41%, with a year-to-date average of ~32% (89 deals & total dal...

David Blennerhassett

Yamada Denki and Otsuka Kagu Do The Deed - A Quick Merger

Yamada Denki and Otsuka Kagu was a marriage made in... Ariake? OK needed cash. YD provided it. Then provided management. Now taking it out. Safe...

Travis Lundy

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