This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. MINIMAX-W: Second Lock-Up Expiry and Convertible Bond Conversion Analysis
- We lay out MiniMax’s September liquidity events, from today’s Undertaking (b) unlock through the 21 Sep bond conversion window.
- We review the stock’s post-Connect inclusion trading, including southbound buying, short interest, consensus revisions.
- We assess the overhang associated with the lock up events.
2. [Japan M&A] Itochu Deal Details for Dentsu Soken (4812); ¥2,880 Is Better than Rival Bid, But…
- Deal details are much as the Nikkei and Dentsu Soken reported. ¥2,880 for the 38.2% not owned by Dentsu. Dentsu and Itochu will be partners with Dentsu consolidating.
- The price is not very high considering the growth, especially when synergies are not included. The price is below the TargetCo FA’s DCF range midpoint w/o synergies.
- But there was a rival bidder in the selection process and they had a lower bid. So it isn’t clear who or what overbidder might come out. This gets done.
3. [Japan Partial Tender] Update on SBI’s Tender for BASE (4477 JP)
- On 28 August, SBI Holdings (8473 JP) announced a Tender Offer to buy 20% of BASE Inc (4477 JP) by Tender Offer at ¥340/share. That was a very small premium.
- My comments were in [Japan Partial Tender] SBI Launches Partial Offer for 20% of BASE (4477 JP) At ¥340 – Needs More. SBI has quite often underpaid on partials.
- Top shareholder Maki-san was released from his confidentiality agreement the same day. Last night he released an updated Large Shareholder Filing Amendment. It tells you something.
4. Progress of 55 Trillion Won Share Buybacks Announced by SK Hynix and Samsung Electronics
- As of 1 September, SK Hynix and Samsung Electronics have repurchased 13.5 trillion won, representing 24.5% of total planned buyback amount.
- At the current pace, SK Hynix is expected to complete its buyback by October 2026. Samsung Electronics is also expected to complete its buyback earlier (in late September or October).
- I continue to maintain the view that Samsung Electronics will announce a much bigger buyback/cancellation program in January 2027.
5. Ichibanya (7630 JP): House Foods (2810 JP) Potentially Exiting Through a Privatisation
- The Nikkei reported that House Foods Group (2810 JP) is considering selling its 51% stake in Ichibanya (7630 JP) by selecting a suitable bidder to privatise the Company.
- The rumoured strong interest from several investment funds despite Ichibanya’s high multiples and downgraded forecasts signals deep underlying value.
- My analysis suggests that an offer price range of JPY1,170 to JPY1,317 per share, a 7.2% to 20.8% premium to the last close.
6. SBI (8473 JP) To Raise Stake in Brangista (6176 JP) In the Market Over 7 Months
- SBI Holdings (8473 JP) announced plans today to increase its stake in Brangista (6176 JP) over the next nearly 7mos.
- A year ago, SBI and Brangista signed a Capital and Business Alliance and SBI unit SBINM GK bought a third party allotment for ~8%.
- Now they are going to increase their stake. It’s a smallcap but it’s worth a look because… supply/demand dynamics…
7. NIKKON Holdings (9072 JP): Two Bidders in the Second Round with Suggestions of a Takeunder
- Bloomberg reported that Bain and Lone Star have advanced to the second round of bidding for Nikkon Holdings (9072 JP), which will commence in early September.
- Bloomberg also noted that a takeunder is possible. At first glance, the argument for a takeunder looks compelling, particularly as Nikkon shares have materially outperformed peers YTD.
- However, a takeunder is unlikely for several reasons and is largely a ruse to dampen expectations. An offer around JPY6,000 remains justifiable.
8. [Japan Buyback] Canon’s ¥200bn Buyback Is Almost Done – A Short Study
- Canon Inc (7751 JP) has been one of the most prolific executors of corporate buybacks in the past 20yrs. Up there with Toyota.
- Historically, its buybacks were finished very early in the buyback period, and were a big percentage of volume while being executed. The current one is different. Slower. Lower impact.
- This piece is a study. Our data shows Canon has underperformed during the buyback as EPS expectations have suffered vs Peers. The study shows post-buyback-end underperformance isn’t a thing.
9. Con Aero Tech (232 HK): 21st Sept SGM. “Surplus Cash” Into Focus
- On the 5th June, Continental Aerospace Technologies (232 HK) (CAT) confirmed an SPA to sell its core business, potentially leading to a cash distribution (HK$0.419-HK$0.436/share), and subsequent winding up.
- The SPA requires reg approvals and a Scheme-like vote. 46.4% of the register is supportive. Additional dividends expected from the sale of property. And any leftover funds.
- The Circular is now out. The SGM is the 21st September. With payment of the special/property dividend (on or before) the 12th October. “Surplus cash” distribution is expected shortly thereafter.
10. StubWorld: Swire Accelerates Cathay Exchange. “As” At Multi-Decade Premium To “Bs”
- Via an accelerated exchange, Swire Pacific (19 HK) is soliciting tenders from its 2027 exchangeable bond holders and, in parallel, placing Cathay (293 HK) shares to fund the bond repurchase.
- Preceding my comments on Swire, are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
