In today’s briefing:
- Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side
- [JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency
- NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
- Torii Pharma (4551 JP): Shionogi & Co (4507 JP) JPY6,350 Tender Offer
- Lifenet Insurance Company (7157 JP) – Revitalizing Future Growth
- Hennge KK (4475 JP): 1H FY09/25 flash update
- Intelligent Wave (4847 JP): Q3 FY06/25 flash update
- Shinmaywa Industries (7224 JP): Full-year FY03/25 flash update
- Hogy Medical (3593 JP): Premium Kits Carry It Through, Recovery in Sight in H2FY26
Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side
- The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
- For the moment, that leads me to believe we get ONE ADD and ONE DELETE though up to three of each is possible.
- Even with only one name replacement, there are some big side trades and US$3.2bn a side to trade for now.
[JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency
- Today after the close, Shionogi & Co (4507 JP) and Torii Pharmaceutical (4551 JP) announced an agreed deal whereby Shionogi would launch a Tender Offer to take over Torii.
- Torii Pharmaceutical shares rallied sharply after earnings so the actual TOB Price of ¥6,350/share is not a particularly high premium vs undisturbed. Valuation transparency is limited. Synergies are not included.
- But the price is an ATH, the company is heavily de-levered (so a 23% premium to undisturbed is decent) and the minimum threshold is not high.
NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
- This morning, the Nikkei says NTT (Nippon Telegraph & Telephone) (9432 JP) has decided, 5 years after taking Docomo private, to buy out minorities in NTT Data Corp (9613 JP).
- NTT owns 58%. The article suggests a “30-40% premium” (¥3,900-4,200) “is likely”, with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.
- It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There’s a cool index event too.
Torii Pharma (4551 JP): Shionogi & Co (4507 JP) JPY6,350 Tender Offer
- Torii Pharmaceutical (4551 JP) has recommended a tender offer from Shionogi & Co (4507 JP) at JPY6,350 per share, a 13.8% premium to the last close.
- Despite the lack of an auction and low takeover premium, the offer is attractive compared to historical trading ranges and peer multiples and represents an all-time high.
- Japan Tobacco (2914 JP), the controlling shareholder, has provided an irrevocable. The required minority acceptance rate is achievable as the offer is reasonable.
Lifenet Insurance Company (7157 JP) – Revitalizing Future Growth
- LIFENET is a pure-play online life insurance company with a solid track record, revamping its strategy to revitalize growth.
- The company has initiated a three-pronged strategy, encompassing tech & services, rebranding, and an ‘embedded’ strategy to integrate life insurance products seamlessly into partner digital ecosystems with engaged customers.
- Key partnerships with KDDI Group (9433) and SMBC Group provide a competitive advantage, and the group credit life insurance offered to mortgage customers of au Jibun Bank, KDDI Group’s online banking subsidiary, has the hallmarks of a new earnings pillar.
Hennge KK (4475 JP): 1H FY09/25 flash update
- Revenue increased 33.6% YoY to JPY5.2bn, with HENNGE One business revenue at JPY4.9bn (+35.2% YoY).
- Operating profit rose 72.6% YoY to JPY1.1bn, with a margin of 21.5% (+4.9pp YoY).
- Gross profit was JPY4.5bn (+36.8% YoY), and SG&A expenses increased to JPY3.4bn (+28.0% YoY).
Intelligent Wave (4847 JP): Q3 FY06/25 flash update
- Orders increased 17.0% YoY to JPY16.1bn; order backlog rose 51.4% YoY to JPY21.2bn, driven by infrastructure projects.
- Cumulative Q3 sales, operating profit, recurring profit, and net income were 72.1%, 64.2%, 63.8%, and 64.4% of FY06/25 forecast.
- Cloud services sales grew 39.5% YoY to JPY2.5bn; order backlog at JPY10.9bn, up 48.4% YoY.
Shinmaywa Industries (7224 JP): Full-year FY03/25 flash update
- The company achieved YoY revenue and profit growth, with operating profit up 18.7% and net income up 23.1%.
- The Special Purpose Truck business anticipates YoY profit growth, driven by selling price hikes and normalized production activity.
- The Aircraft business expects increased orders and production volumes for Boeing components, despite a temporary lull in production.
Hogy Medical (3593 JP): Premium Kits Carry It Through, Recovery in Sight in H2FY26
- Hogy Medical (3593 JP) reported flat sales of ¥39.1B in FY25. However, sales from Premium kits rose 18%. Surgical kits category contributed 66% of total revenue.
- Higher costs dented operating margin by 100 bps while net profit declined 46% YoY to ¥1.5B due to higher tax outgo.
- The company guided FY26 sales to grow 7% to ¥41.8B, with profits also expected to witness mid to high single digit growth.
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