In today’s briefing:
- [Japan M&A] Paramount Bed (7817 JP) Founding Family Takeout – Too Cheap, Deserves Activist Response
- Paramount Bed Holdings (7817 JP): Another MBO Susceptible to Activism
- Timing a Structural Pivot in Samsung’s Max Stretched Pref Discount: Potential Special Dividend
- Mandom (4917 JP): Two Is a Company as Murakami Joins the Fray
[Japan M&A] Paramount Bed (7817 JP) Founding Family Takeout – Too Cheap, Deserves Activist Response
- In a fairly common pattern, the founding family (38% ownership) of Paramount Bed Holdings Co Lt (7817 JP) have launched an MBO.
- It is too cheap at 4.2x adjusted EV/EBITDA (one could argue it is 5.0x but they also have net receivables) for such a ubiquitous brand and growth.
- Soft99 Corp (4464 JP) may have been a one-off. Maybe not. People may look at this situation through that lens. It deserves that look.
Paramount Bed Holdings (7817 JP): Another MBO Susceptible to Activism
- Paramount Bed Holdings Co Lt (7817 JP) has recommended an MBO at JPY3,530, a 32.2% premium to the last close price. The offer represents a ten-year high.
- The offer is below the midpoint of the special committee IFA’s DCF valuation range and its requested price. Hibiki has previously suggested an intrinsic value of JPY4,929.
- The setup shares several traits with the Mandom MBO, and has the potential for a bump, particularly if an activist emerges as a substantial shareholder or agitates for better terms.
Timing a Structural Pivot in Samsung’s Max Stretched Pref Discount: Potential Special Dividend
- Pref spread looks stretched near 21–22%, likely a pullback soon. Structural re-rate needs a major Samsung narrative shift.
- A surprise Samsung special dividend could pivot the pref discount; H2 FCF, Q3 prelims, and lighter capex are the key swing factors.
- Expect a short-term pullback; but still stay cautious. Watch the memory upcycle and consider a discount-narrowing trade around late September.
Mandom (4917 JP): Two Is a Company as Murakami Joins the Fray
- Murakami reported a 7.14% ownership ratio in Mandom Corp (4917 JP). The average buy-in price of JPY2,070.73 per share is 5.6% above the JPY1,960 CVC-sponsored MBO.
- Murakami undoubtedly shares Hibiki’s concerns. On 15 September, Hibiki issued an open letter questioning the rationale behind the Board’s recommendation of a CVC-sponsored preconditional MBO.
- With the emergence of Murakami, CVC and the founding family’s options narrow. The need for satisfaction of the precondition buys time, but a bump seems inevitable.
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