In today’s briefing:
- Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
- Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500
- Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62
- Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO
- Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time
- Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (March and April 2025)
- Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung
- BBVA’s Hostile Offer for Sabadell Moves into Final Phase: The Catalan Conundrum
- Starz RemainCo Deep Dive
Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
- Toyota Industries is a relatively complicated business. It owns lots of shares of Toyota and other companies. It has a financing business, and runs ¥500+bn of EBITDA.
- As of 31 March 2025, the “Enterprise Value” of the Operating and Financing Business together was about ¥2.2trln. The “Asset Ownership Business” was at ¥2.8trln (1yr ago it was ¥4trln).
- If you think buying the Operating Business at 6x EBITDA is appropriate, that means the Asset Ownership Business block buy gets done at 31-March-2025 prices. Worth thinking about.
Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500
- A Nikkei article today suggested Minebea Mitsumi (6479 JP) would overbid Yageo’s dramatic 20% overbid of Minebea’s early ¥4,500 overbid of Yageo’s initial ¥4,300 bid for Shibaura Electronics (6957 JP).
- Now the news is out. MinebeaMitsumi has bid ¥5,500. Shibaura Electronics has endorsed. This is bang-in-line with the expected path. The question is now YAGEO’s overbid, expected 7 May.
- If I were YAGEO, I would wait for Shibaura’s earnings a couple of days later, then overbid by ¥100-150 and go for 35 days. There’s optionality there.
Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62
- Haikou Meilan International Airport Company entered an SPA with Hainan Island Construction (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 per share (HK$10.62).
- The SPA completion requires several regulatory approvals, which are low-risk, particularly as Hainan SASAC is the largest shareholder of the offeror and the seller.
- Under Rule 26.1 of the Takeovers Code, upon completion, the offeror will be required to make an unconditional mandatory cash offer at HK$10.62 per share. The MGO price is final.
Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO
- Hainan Meilan International Airport (357 HK) has announced a potential change of control, via the domestic shares.
- Haikou Meilan’s major shareholder, Hainan Airport Industrial, has entered into a SPA with Hainan Island (600515 CH) to sell its 50.19% stake, the completion of which triggers an unconditional MGO.
- The H-share Offer price will be HK$10.62/share. That’s not compelling; but it’s not meant to be as Hainan Airport Industrial and Hainan Island Construction are ultimately controlled by Hainan SASAC.
Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time
- Minebea Mitsumi (6479 JP) has revised its tender offer for Shibaura Electronics (6957 JP) to JPY 5,500, representing a 1.9% premium over Yageo Corporation (2327 TT)’s JPY 5,400 hostile offer.
- There are factors supporting Yageo again outbidding Minebea, and Yageo calling it quits. A revised Yageo could potentially touch JPY6,000, 40% higher than its first offer.
- The shares are trading 7.1% above Minebea’s offer, factoring in a fair chunk of the upside from an ongoing bidding war. Take profits as risk/reward looks unattractive.
Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (March and April 2025)
- In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in March and April 2025.
- There were 40 companies in the Korean stock market that announced share buybacks in the past two months. On average, the share buyback announcements represented 1.7% of outstanding shares.
- Astute traders should put alert signals on share buyback announcements in Korea with more than 3% outstanding shares.
Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung
- On 30 April, Lee Myung-Hee (Chairwoman of Shinsegae Group) decided to transfer all of her 10.2% stake in Shinsegae (004170 KS) as a gift to her daughter Chung Yoo-Kyung.
- After this gift, Chung Yoo-Kyung’s ownership in Shinsegae will rise from 18.95% to 29.16%.
- We are positive on this share transfer of 10.2% stake in Shinsegae from mother (Lee Myung-Hee) to her daughter Chung Yoo-Kyung on the share price impact on Shinsegae.
BBVA’s Hostile Offer for Sabadell Moves into Final Phase: The Catalan Conundrum
- CNMC approved BBVA’s bid with mild SME lending and branch access commitments. The offer now enters Phase 3, with government review and CNMV filing expected by late Q2 2025.
- Sabadell shares trade 6.7% above the offer value, suggesting market expectation of an improved bid or deal failure. The gross spread is negative despite regulatory momentum.
- BBVA’s CET1 would drop to 11.99% under current terms. It can raise the cash offer by €0.12–0.17/share and still stay above 11.5%, allowing room to improve the deal.
Starz RemainCo Deep Dive
Lions Gate Entertainment will spin off its 87.2% stake in its studio business (Lionsgate Studios, ticker “LION”) from its Starz media networks division, creating two independent public companies, on May 6, 2025.
The RemainCo will be named Starz and trade under the ticker STRZ.
- Starz is a premium subscription video service that operates both a traditional premium cable channel and a modern streaming platform (OTT).
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