In today’s briefing:
- [Japan Activism] Exedy (7278 JP) – Buying Back Bigly
- Fuji Soft (9749 JP) – Bain Bumps UnBigly, and FSI Responds
- Vesync (2148 HK): Expect The Yangs To Privatise
- Blackstone Eyes Move On Dexus (DXS AU)
- Delisting Offer for Alba at 79% Premium
- CPMC Holdings (906 HK): Festive Cheer as Precondition Satisfied🎄
- Macquarie’s £8.7/share Bid for Renewi Supported by Key Shareholders Amid 9% Spread and Due Diligence Completion
- Aviva’s Acquisition of Direct Line: 9.5% Merger Arbitrage Opportunity Amid Regulatory Considerations and Shareholder Dynamics
- Media Concierge’s Acquisition of National World: 9.5% Upside Amidst Complex Business Dynamics
[Japan Activism] Exedy (7278 JP) – Buying Back Bigly
- Exedy Corp (7278 JP) announced an offering of 36% of its shares at end-May. Long-time “owner” Aisin (7259 JP) was getting out. Since then, the company has bought back shares.
- Activist Murakami Group has bought 27% of the company. Between Murakami and the buyback, the public has net sold 5% of the company since end-March. Kinda shocking.
- There is another 35% of Max Real World Float to buy back, and at current pace, they’ll be done by mid-March 2025. Then what? That’s the really big question.
Fuji Soft (9749 JP) – Bain Bumps UnBigly, and FSI Responds
- ~4 weeks ago, Fuji Soft Inc (9749 JP) responded to Bain’s Proposal to take over the company but got KKR to bid ¥1 more, then said that covered it.
- The Special Committee then asked the FSI Board to halt further negotiations with Bain, and to ask Bain to destroy all confidential documentation.
- Bain rejected saying it contravened METI Guidelines on Corporate Takeovers and reappeared 2 days ago with a ¥9,600 bid. The structure/details of Bain’s bid was probably a strategy mistake.
Vesync (2148 HK): Expect The Yangs To Privatise
- Vesync (2148 HK), a manufacturer of small home appliance, is currently suspended pursuant to the Takeovers Code.
- FY23 was Vesync’s best result since its December 2020 listing; and FY24E is on track to go one better. Yet the share price is 24% adrift of the IPO price.
- The Yang family, led by chairman/CEO, control ~69.26% of Vesync. An Offer price around the IPO price may be enough to take Vesync private.
Blackstone Eyes Move On Dexus (DXS AU)
- Reportedly, Blackstone is running a ruler over Dexus Property (DXS AU), one of Australia’s leading fully integrated real estate groups.
- The Australian article flips flops: “Blackstone is understood to have been back on the scene“; but “cooled on the opportunity for now“.
- Almost exactly four year ago, Blackstone paid A$2.1bn for a 49% stake in the Dexus Australian Logistics Trust, a prime logistics portfolio managed and jointly owned by Dexus.
Delisting Offer for Alba at 79% Premium
- Christmas came early for Corp Financiera Alba Sa (ALB SM)‘s shareholders as a 79% premium delisting offer for a holding that was last trading at a whoping 50.7% discount/NAV.
- For a while I had been saying that Alba was very cheap. Although it is difficult to disagree with such a premium, controling shareholders are buying at a 11.5% discount.
- They are value investors after all. Settlement should happen around April 4. Spread is 1.9%/6.4% (gross/annualised). Long Alba shares (not the holding spread).
CPMC Holdings (906 HK): Festive Cheer as Precondition Satisfied🎄
- ORG Technology Co., Ltd. A (002701 CH)’s offer for CPMC Holdings (906 HK) has received SAFE approval. Therefore, the precondition is satisfied.
- The offer and response document will be despatched by 20 December and 3 January 2025, respectively. The Board will recommend the offer.
- The offer should be declared unconditional by the first closing date. At the last close and late-January 2025 payment, the gross/annualized spread was 7.3%/88.0%.
Macquarie’s £8.7/share Bid for Renewi Supported by Key Shareholders Amid 9% Spread and Due Diligence Completion
- Macquarie Asset Management’s final bid for Renewi is £8.7/share, with a current spread of 9% and a downside risk of 25%.
- Three shareholders holding 15.1% of Renewi have signed irrevocable support agreements; confirmatory due diligence is ongoing.
- Macquarie’s offer values Renewi at 6.7x TTM adj. EBITDA, aligning with European peers’ valuations, considering the control premium.
Aviva’s Acquisition of Direct Line: 9.5% Merger Arbitrage Opportunity Amid Regulatory Considerations and Shareholder Dynamics
- Aviva is acquiring Direct Line for £1.297 cash, 0.2867 AV shares, and £0.05 dividend, totaling £2.70/share.
- Direct Line’s board is prepared to recommend the offer; Aviva is conducting due diligence with a PUSU date set for December 25.
- The offer values Direct Line at 1.6x BV and 2.6x TBV, with potential regulatory scrutiny due to market share.
Media Concierge’s Acquisition of National World: 9.5% Upside Amidst Complex Business Dynamics
- Media Concierge’s £0.23/share offer for National World represents a 9.5% upside, with shareholder approval likely guaranteed.
- Antitrust risk is negligible due to Media Concierge’s focus on Irish newspapers and NWOR’s exclusive UK operations.
- NWOR’s valuation is challenging due to lack of local peers and varying global newspaper company valuation ranges.
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