In today’s briefing:
- [Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
- Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected
- [Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
- Telcoware: Tender Offer To Take the Company Private
- Xanadu Mines (XAM AU) Inks Deal With Bastion After Zijin Tarries
- Svenska Handelsbanken: Arbitraging Brought to Book
- Elevation Oncology’s Strategic Review: Potential Liquidation or Sale Offers 60% Upside Opportunity at $0.28/share
- Weekly Update (MCK, LBTYA, SNRE, AMRZ)
- StubWorld: Toyota Industries/Motors, GMO Internet
[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
- Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
- In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
- I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now.
Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected
- Kyodo news agency reported that Toyota Industries (6201 JP) plans to accept a tender offer by Toyota Motor (7203 JP) and Toyota Chairman Akio Toyoda, potentially in May or June.
- The Nikkei reported that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline.
- These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.
[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
- On 9 May Mitsubishi Logisnext Co., Ltd. (7105 JP) delayed earnings by 30 minutes. Shares popped. Then earnings were released, no deal, and shares crashed. Now they are rebounding.
- But they remain volatile and subject to dips like the one this AM -5% at one point. Fears may be due to the idea that first smoke here was Dec-2024.
- 5 months later, no deal yet. Bids were due pre-earnings but with tariffs and writedowns, one wonders if bidders were waiting for results.
Telcoware: Tender Offer To Take the Company Private
- Telcoware announced that the largest shareholder and CEO of the company (Keum Han-Tae) will be undertaking a tender offer of 2.332 million shares (25.24%) to take the company private.
- Tender offer price is 13,000 won per share. Tender offer period is from 19 May to 10 June.
- Telcoware has 4.08 million treasury shares, accounting for 44.1% of outstanding shares.
Xanadu Mines (XAM AU) Inks Deal With Bastion After Zijin Tarries
- Xanadu (XAM AU), a Mongolian copper-gold mining play, has entered a deal with Bastion, two weeks after an agreement with JV partner and major shareholder Zijin Mining (601899 CH) lapsed.
- Bastion, which comprises Singapore-based Baroo and Xanadu director Ganbayer Lkhagvasuren, are offering A$0.08/share in cash. Bastion is also subscribing for 286.8mn shares, at A$0.06/share, or 13% fully diluted.
- The off-market Offer is contingent on a 50.1% acceptance hurdle. CAAF (11.85%) is supportive. No word on how Zijin (19.8% stakeholder, before dilution) will play this.
Svenska Handelsbanken: Arbitraging Brought to Book
- Handelsbanken B shares trade at a ~55% premium to A shares despite lower voting rights, liquidity, and index status — a rare and statistically extreme dislocation.
- Regression and post-2020 cointegration confirm mean-reverting behavior, supporting a relative value trade favoring SHB A over SHB B.
- Structural constraints on arbitrage and asymmetric flow dynamics may delay convergence, but the pricing gap remains fundamentally unjustified and actionable.
Elevation Oncology’s Strategic Review: Potential Liquidation or Sale Offers 60% Upside Opportunity at $0.28/share
- Elevation Oncology’s market cap is $16.5m, trading at a 50% discount to its mid-year cash guidance of $30m-$35m.
- The company has no debt, $0.5m in payables, $3.7m in accrued expenses, and guided mid-year cash of $30m+.
- Potential upside of 30%-60% is based on liquidation or buyout scenarios, considering working capital liabilities and cash burn.
Weekly Update (MCK, LBTYA, SNRE, AMRZ)
Before I dig into my regular update, I want to share one chart that caught my eye this week.
Colin King did a nice job modeling out Lionsgate RemainCo Stub / Starz valuation from last May to now.
Interesting to see that at one point it was trading at a negative $1 price.
StubWorld: Toyota Industries/Motors, GMO Internet
- Given recent – and ongoing developments – with Toyota Industries (6201 JP) and GMO Internet (4784 JP), I’m revisiting my NAVs.
- Preceding my comments on the Toyota Group and GMO, 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%.
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