In today’s briefing:
- [Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities
- [Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
- [Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame
- Swire Pac (19 HK): Thai Beverage Spin-Off
- NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000
- Shibaura Electronics (6957 JP): End Game Nears as Yageo Launches Its Hostile Tender at JPY6,200
- Mitsubishi Shokuhin (7451 JP): MitCorp (8058 JP) Light Tender Offer at JPY6,340
- [Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio
- Korea’s FSC Is Rolling Out the Legal Framework for Fractional Share Trading, Starting September 30
- What Will Remain with Demerged Siemens Ltd?
[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities
- Pre-Open, we got a Nikkei article which suggested four different prices possible. We got something in the middle. I think NTT is probably overpaying here.
- There is a fair bit of transparency in the documents and valuation. That is encouraging. There are no synergies counted in the fair calculations. That is discouraging.
- This will not trade like a “normal” Japan risk arb situation. There will be nuances.
[Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
- Mitsubishi Shokuhin (7451 JP) was supposed to announce earnings at 2pm JST. They didn’t. Someone (or people) decided that meant there might be a takeover. There was.
- The stock popped nearly 15% to ¥6,200, paused, was flat for an hour, then popped again, closing at ¥6,150/share. Post-close, we get a deal at ¥6,340/share.
- A disappointing process. At ¥6,240, the Special Committee said it was “far from a standard that takes into account the interests of TargetCo’s minority shareholders.” At ¥6,340, they dealt. Aaaargh.
[Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame
- Yageo Corporation (2327 TT) has now strongly overbid Minebea’s weak overbid of Yageo’s strong overbid of Minebea’s weak overbid of Yageo’s initial hostile offer for Shibaura Electronics (6957 JP).
- We are now 40% higher than the initial bid and the best bid is approaching the top end of Valuation Agent’s top-of-DCF-range prices. There may be a bit more. Maybe.
- The question now is only whether Minebea responds. If it does, there is a little juice left, but if not, that’s it. It should get done.
Swire Pac (19 HK): Thai Beverage Spin-Off
- Swire Pacific (A) (19 HK) is proposing the spin-off and separate listing on the SET of non-wholly-owned ThaiNamthip Corporation Limited, a Coca-Cola franchise operator in Thailand, Cambodia and Laos.
- On the 30th September, Swire completed the 55.7% acquisition for THB42,615.7mn (HK$9,470.1mn). ThaiNamthip concurrently sought to acquire a 30% stake in Swire Coca-Cola’s operations in Vietnam and Cambodia for HK$2,114.6mn.
- At the time of the acquisition, ThaiNamthip had an extrapolative price tag of ~HK$17bn. Should the proposed spin-off complete, ThaiNamthip will remain a non-wholly owned subsidiary of Swire.
NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000
- NTT Data Corp (9613 JP) has recommended a tender offer from NTT (Nippon Telegraph & Telephone) (9432 JP) at JPY4,000 per share, a 33.7% premium to the last close.
- The Nikkei earlier reported on the offer. The offer represents an all-time high and is attractive compared to historical trading ranges, peer multiples and precedent transactions.
- The offer could be considered light as it is below the midpoint of the target IFA’s DCF valuation range. However, the shareholder structure suggests a done deal.
Shibaura Electronics (6957 JP): End Game Nears as Yageo Launches Its Hostile Tender at JPY6,200
- Yageo Corporation (2327 TT) has revised its tender offer for Shibaura Electronics (6957 JP) to JPY6,200 per share, a 12.7% premium to Minebea Mitsumi (6479 JP)’s JPY5,500 offer.
- There are factors supporting Minebea again outbidding Yageo and Minebea withdrawing its offer. Minebea is in a predicament as Yageo has established that it wants Shibaura at any cost.
- The most likely scenario is that Minebea withdraws its tender and the Board switches to a neutral opinion due to its ongoing non-price-related concerns.
Mitsubishi Shokuhin (7451 JP): MitCorp (8058 JP) Light Tender Offer at JPY6,340
- Mitsubishi Shokuhin (7451 JP) has recommended a tender offer from Mitsubishi Corp (8058 JP) at JPY6,340 per share, a 17.2% premium to the undisturbed price.
- While the offer represents an all-time high, it is materially below the midpoint of the IFA DCF valuation range.
- The light offer resulted from an unusually long process, with twelve rounds of proposals. However, the shareholder structure suggests a done deal.
[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio
- Large Tsuruha Holdings (3391 JP) investor Orbis Investments last month said they were against the Tsuruha/Welcia merger ratio. They wanted a cash takeover above Aeon’s Oasis buy price from 2024.
- Influential shareholder proxy advisor ISS has apparently come out recommending shareholders vote against. That’s a start, but the hard work needs to be Orbis talking to domestic passive managers.
- Getting 90% of foreign active managers as of end-February would make it a very close-run thing, but Orbis really needs some more to show up against the ratio.
Korea’s FSC Is Rolling Out the Legal Framework for Fractional Share Trading, Starting September 30
- With the Capital Markets Act in place, real-time quotes, intraday fills, and orderbook trading for fractional shares are possible—opening the door for Korea’s Robinhood moment.
- Fractional share trading in Korea is still minimal at 0.1% of volume, but real-time infrastructure from brokers could drive significant flow and growth.
- It will deepen sentiment-driven flows and cause real-time price discovery shifts, opening up new trading opportunities.
What Will Remain with Demerged Siemens Ltd?
- Post-Demerger, Siemens Ltd (SIEM IN) continues with Digital Industries, Smart Infrastructure, and Mobility, focusing on core segments like automation, electrification, and rail transport.
- The company is getting significant orders in each segment with strong tailwind across all segment.
- Siemens Limited’s remaining business is projected to grow at a 15% CAGR, supported by strong order backlogs and improved margins.
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