In today’s briefing:
- Seven & I Holdings (3382 JP): Shares Under Pressure as Rumours Swirl
- StubWorld: Cheung Kong’s Geopolitics
- Japan Post Bank US$4bn Placement Updates-Performing Similar to Its Last. Past Large Deals Comparison
- CVC Bump Higher (¥1,275) Than Their Final Price (¥1,250), Get GMO to Roll In Their 12.1%.
- Toyo Seikan (5901) – Big New Buyback Shows The Way To a Breakout of 20yr Range
- Kum Yang Gets Designated as an Administration Stock and To Be Deleted from KOSPI 200 Index
- Best Ideas of 2025
- Sapporo’s 2025 Potential Holds Limited Upside After Investor Activism’s 300% Gains
- Macromill (3978 JP): CVC Bumps to JPY1,275 Despite Declaring the Previous Offer Final
Seven & I Holdings (3382 JP): Shares Under Pressure as Rumours Swirl
- Seven & I Holdings (3382 JP) denied a Yomiuri article that the Board has decided not to accept an Alimentation Couche-Tard (ATD CN) bid in favour of the restructuring plan.
- Despite the Board’s assertions that it is still having constructive discussions with Couche-Tard, its actions suggest otherwise.
- Couche-Tard remains interested but faces increasing roadblocks. The valuation is undemanding but the news flow is unlikely to support a rerating in the near-term.
StubWorld: Cheung Kong’s Geopolitics
- CK Hutchison Holdings (1 HK) (CKH) is trading “cheap” as Panama’s Supreme Court agrees to consider a request to nullify CKH’s canal concessions.
- Preceding my comments on CKH, CK Infrastructure Holdings (1038 HK) (coming up cheap on my monitor), and Power Assets Holdings (6 HK) 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%.
Japan Post Bank US$4bn Placement Updates-Performing Similar to Its Last. Past Large Deals Comparison
- Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
- JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
- We have looked at the deal dynamics in our previous note. In this note, we talk about the updates since then.
CVC Bump Higher (¥1,275) Than Their Final Price (¥1,250), Get GMO to Roll In Their 12.1%.
- Today, the last day of the ¥1,250 “Final Price” CVC Tender Offer for Macromill, Inc (3978 JP), CVC has bumped price to ¥1,275 and extended another two weeks.
- In the process, they got agreement from GMO to tender their 12.1% and GMO gets to reinvest into an 18-19% position in the Bidco.
- Investors are now competing against “activists” who aren’t in public markets. 20.6% of the register don’t like the ¥1,250-1,275 price either. But they aren’t selling. They’re re-buying there. You’re not.
Toyo Seikan (5901) – Big New Buyback Shows The Way To a Breakout of 20yr Range
- Toyo Seikan Group Holdings L (5901 JP) started down the “good governance path” a couple of years ago. The stock ran up. Then it drifted back lower.
- They had promised a decent payout ratio, cross-holding sales, and “buybacks conducted in an agile manner.”
- On Friday 28 Feb, the company announced a large buyback and future share cancellation.
Kum Yang Gets Designated as an Administration Stock and To Be Deleted from KOSPI 200 Index
- On 4 March, Korea Exchange announced that it will designate Kum Yang (001570 KS) as an administration stock, resulting in a deletion from KOSPI 200 index.
- These increased penalty points and fine are mainly from the company inflating the expected performance of a Mongolian mine which the company had plans to acquire shares.
- We continue to remain negative on Kum Yang. As a result of designation as an administration stock and deletion from KOSPI 200, investors will likely push down this stock further.
Best Ideas of 2025
- The range of ideas is broad. The smallest market cap is a $15MM Canadian micro-cap that is trading below its net cash, and the largest is an $25BN market cap online travel company that is gobbling up its own shares.
- We have ideas profiled from Poland, Canada, India, Austria, Argentina, Italy, and of course, the United States.
- The report will start with my personal favorite idea and then cover the additional ideas in alphabetical order.
Sapporo’s 2025 Potential Holds Limited Upside After Investor Activism’s 300% Gains
- Sapporo Holdings (2501 JP)’s beer, food, and soft drinks businesses are now trading near 19.0x our 2025 OP estimate, suggesting some remaining upside, especially if guidance is revised upward.
- We believe the company’s 2025 guidance is overly conservative, as Sapporo stands to benefit the most from Japan’s liquor tax revisions.
- If growth momentum persists, we estimate 2025 OP could reach ¥22.3bn, surpassing the current ¥17.5bn guidance, though the 300% upside driven by investor activism has mostly run its course.
Macromill (3978 JP): CVC Bumps to JPY1,275 Despite Declaring the Previous Offer Final
- Despite declaring the previous JPY1,250 offer final, CVC has bumped its Macromill, Inc (3978 JP) offer by 2.0% to JPY1,275.
- CVC has secured an irrevocable from GMO. The total irrevocable represents a 23.67% ownership ratio. Despite the bump and GMO irrevocable, success still hangs in the balance.
- Securing TriVista’s support remains elusive, and CVC could try to lower the minimum tendering condition. The downside is low, as the backend will have support on a deal break.
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