In today’s briefing:
- BASE (4477 JP): Maki-San Forces SBI’s Hand, but the Upside Is Largely Priced In
- Curator’s Cut: Debt Gets Dearer, Diesel Runs Dry & Strategic Stakes Come Undone
- McDonald Japan (2702): Higher Margin but Cheaper than Peers
- What Do Managers Realize After Going Private?
BASE (4477 JP): Maki-San Forces SBI’s Hand, but the Upside Is Largely Priced In
- Maki-San likely holds around 28% of BASE Inc (4477 JP), targets over 30% via tender and no longer backs SBI. With shares 17% above terms, SBI cannot succeed at JPY340.
- SBI likely needs JPY420–440 to beat a potential Maki tender. A token bump won’t work, so a small fill or walk-away may make more economic sense.
- At the last close (JPY399), the risk/reward is unattractive. Based on a scenario analysis of the estimated prorated value, the upside is about 6% against a 12–20% downside.
Curator’s Cut: Debt Gets Dearer, Diesel Runs Dry & Strategic Stakes Come Undone
- Welcome to Curator’s Cut – a fortnightly roundup of standout themes from the 1,200+ insights shared on Smartkarma.
- In this cut, we look at who pays as yields climb, follow the squeeze in refined products, and track the unwinding of strategic stakes from Tokyo to Seoul and Singapore.
- Want to dig deeper? Comment or message with the themes you’d like to see highlighted next.
McDonald Japan (2702): Higher Margin but Cheaper than Peers
- Mcdonald’s Japan (2702 JP) is Japan’s defensive, high-quality QSR name in Japan with a defensible moat.
- Minimal impact from volatility in tourist arrivals, as most of the outlets are in the suburban areas; therefore, it is truly a domestic consumption story.
- McDonald Japan’s operating profit margin is double that of Zensho and Skylark (which comes from operational discipline and price hike), while its PER is still lower, which is the opportunity
What Do Managers Realize After Going Private?
- The elimination of “parent-subsidiary listings” in the broad sense—including affiliated companies—and delistings resulting from TOBs etc. that lead to industry consolidation are expected to improve the profitability of listed companies.
- After delisting, a company will have no choice but to break away from management style that defers challenges to work toward improving earnings in line with the fund’s profit targets.
- After a company is delisted, some executives may realize for the first time that maximizing shareholder interests is the primary management objective of a corporation.
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