In today’s briefing:
- [Japan M&A] Yutaka Giken (7229 JP) TOB – Possibly the Most Offensively Low TOB Price I’ve Ever Seen
- Curator’s Cut: Arbs Go A-H, Copper Plays & China’s Property Pulse
- Is NPS Really Going for Board Seat Play Via Cumulative Voting? Field Check on This Narrative
- RPMGlobal (RUL AU): Caterpillar Mulling a Privatisation Bid
- Merger Arb Mondays (01 Sep) – Dongfeng, ENN, Joy City, Kangji, Mayne, Santos, Shibaura, CareNet
- (Mostly) Asia M&A, Aug 2025 Wrap: Dongfeng Motor, Kangji, Carenet, Nihon Chouzai, Technopro
- Carved in Wood: Sidara’s Firm Offer, but Fragile Conditions
[Japan M&A] Yutaka Giken (7229 JP) TOB – Possibly the Most Offensively Low TOB Price I’ve Ever Seen
- Honda Motor (7267 JP) and Samvardhana Motherson International Ltd (MOTHERSO IN) have arranged to buy Honda’s 69.7%-owned subsidiary Yutaka Giken (7229 JP) in a Tender Offer.
- The transaction structure means Motherson buys Yutaka for less than net cash but even assuming Motherson pay minority TOB price for everything, TOB ex-net cash = 0.05x PBR, <1x EBITDA.
- But they are paying less. They are paying ¥12.4bn less than net cash, and getting the other ¥58bn of net assets (¥23bn inventory, the rest in hard assets) for free.
Curator’s Cut: Arbs Go A-H, Copper Plays & China’s Property Pulse
- Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ Insights published over the past two weeks on Smartkarma
- In this cut, we explore A-H share trading dynamics, consider copper market dynamics and plays, and China’s bottoming/stabilizing real estate market
- Want to dig deeper? Comment or message with the themes you’d like to see highlighted next
Is NPS Really Going for Board Seat Play Via Cumulative Voting? Field Check on This Narrative
- Short-Term, pinpointing exact tickers off this NPS/cumulative voting narrative is tough—activism risk is real, but predicting moves in governance-sensitive names is still premature.
- NPS may go aggressive, potentially sparking a market-wide narrative. If limited activism unwinds, Korean stocks could see a broad re-rate, beyond just individual governance names.
- Tactically, consider enhanced setups in these names under a passive framework, while closely monitoring governance developments and NPS-driven activism for actionable alpha in individual tickers.
RPMGlobal (RUL AU): Caterpillar Mulling a Privatisation Bid
- The AFR reports that Caterpillar Inc (CAT US) and four other bidders are considering a privatisation bid for RPMGlobal Holdings Limited (RUL AU) at around A$5.00 per share.
- In response to the article, RPM entered a trading halt the same day regarding “an indicative proposal from a third party regarding a potential acquisition.”
- RPM’s shareholder structure facilitates an offer. The rumoured offer is reasonable but is far from a knockout bid, suggesting the potential of a bidding war.
Merger Arb Mondays (01 Sep) – Dongfeng, ENN, Joy City, Kangji, Mayne, Santos, Shibaura, CareNet
- I 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: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Joy City Property (207 HK), Santos Ltd (STO AU).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Ashimori Industry (3526 JP), Carenet Inc (2150 JP), Ainsworth Game Technology (AGI AU).
(Mostly) Asia M&A, Aug 2025 Wrap: Dongfeng Motor, Kangji, Carenet, Nihon Chouzai, Technopro
- For Aug 2025, 17 new transactions (firm and non-binding) were discussed on Smartkarma (by the Quiddity team) with an overall announced deal size of ~US$18bn.
- The average premium for the new transactions announced (or first discussed) in August was 48%, with a year-to-date average of 47%.
- The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31%
Carved in Wood: Sidara’s Firm Offer, but Fragile Conditions
- Sidara’s 30p/share offer, backed by $450m funding and debt extension, is the only viable path; yet “Exceptional Conditions” make this deal unusually binary despite board support.
- The audit (clean FY24 balance sheet opinion by 31 Oct 2025) and A&E by 31 Dec 2025 are non-waivable gates; clearing both crystallizes 30p, missing either drives automatic lapse.
- Probability-Weighted target price stands at 24.9p; distressed entries retain compelling upside, but pre-existing holders rely heavily on successful completion. Break risk implies severe equity impairment if conditions fail.
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