In today’s briefing:
- [Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.
- Goldlion Holdings (533 HK): An Unexpected HK Arbageddon
- Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?
- Merger Arb Mondays (12 May) – ESR, NTT Data, Shibaura, Torii, Imagica, Zeekr, Sinarmas, Gold Road
- Digging Deeper: The Vote Failed, But the Value in Rio Tinto’s Dual Listing Remains Untapped
- Sinarmas Land (SML SP): The Family Bumps Terms After All
- AVJennings (AVJ AU) : 11th July Vote On AVID’s Offer
[Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.
- This deal should not come as a surprise. Bloomberg has an article out saying tycoons are taking companies private to avoid shareholder activism. It’s not just that.
- The stated reasons (competitive environment requiring faster decision-making and significant restructuring) are all kinda hot garbage. This is being done at adjusted EV/EBITDA of 4x and 10x FCF.
- And there are no synergies counted, and half of the Adjusted EV is net receivables+inventory equal to about 2mos of revenues. This is being done too cheaply. But…. TIJ baby…
Goldlion Holdings (533 HK): An Unexpected HK Arbageddon
- Goldlion Holdings (533 HK) shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
- The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.
- Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.
Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?
- Nissin Corp (9066 JP) shares were up 10.3% based on a Bloomberg report that it would be privatised through a Bain-sponsored MBO.
- The deal is expected to exceed JPY100 billion. Assuming this refers to a market cap, the implied offer price is around JPY6,500 (21.5% premium to last close).
- While the rumoured offer represents an all-time high share price, it is light compared to precedent and peer multiples. A long-dated offer makes it susceptible to a counterbid.
Merger Arb Mondays (12 May) – ESR, NTT Data, Shibaura, Torii, Imagica, Zeekr, Sinarmas, Gold Road
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Imagica Robot Holdings (6879 JP), ENN Energy (2688 HK), Oneconnect Financial Technology (6638 HK), Insignia Financial (IFL AU), Smartpay Holdings (SPY NZ), Seven & I Holdings (3382 JP).
- Lowest spreads: Bright Smart Securities And (1428 HK), Abacus Storage King (ASK AU), AEON Mall (8905 JP), Dada Nexus (DADA US), SLB Development (SLB SP).
Digging Deeper: The Vote Failed, But the Value in Rio Tinto’s Dual Listing Remains Untapped
- The shareholder vote failed, but momentum builds: Despite only 19.35% support, institutional backing signals growing pressure on Rio Tinto’s board to revisit the dual-listed company structure in future.
- Valuation gap widens, thesis strengthens: With RIO Ltd trading at a 23.2% premium over RIO plc, the economic case for unification — and the relative value trade — becomes increasingly compelling.
- Not statistical arbitrage, but event-driven optionality: The long plc / short Ltd setup lacks persistent mean reversion but offers asymmetric upside if governance shifts, tax changes, or structural catalysts force convergence.
Sinarmas Land (SML SP): The Family Bumps Terms After All
- I was wrong. In Sinarmas Land: Bumping Fades Despite IFA Opining Not Fair, I said the Offer needed a bump, but that outcome was looking less likely.
- The Widjaja family has now bumped terms to S$0.375/share, up from S$0.31/share, or a 21% increase. Terms have not been declared final.
- The IFA’s estimated fair value range for Sinarmas Land (SML SP) was S$0.350 to S$0.361/share. Expect a follow-up opinion revising their conclusion to “Fair and Reasonable” from “Not Fair but Reasonable“.
AVJennings (AVJ AU) : 11th July Vote On AVID’s Offer
- On the 1st April, Avjennings Ltd (AVJ AU), a widely recognised home builder in Australia/New Zealand, entered into a Scheme Implementation Deed with AVID at A$0.655/share.
- A special dividend – included in the Scheme consideration – could add A$0.072/share in franking credits (to those shareholders who can take advantage), or ~11% of the consideration. That’s chunky.
- The Scheme Booklet is now out, with a Scheme Meeting on the 11th July, and expected payment on or before the 14th August. The IE (Kroll) says “fair & reasonable“.
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