In today’s briefing:
- Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF
- (Mostly) Asia-Pac M&A: Paragon REIT, Kaonavi, Arcadium Lithium, Sun Art Retail, HKBN, and Seven & I
- Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer
- Last Week in Event SPACE: Trend Micro, Furukawa, Melco, Ingenia/Lifestyle
- Otsuka Holdings (4578 JP): Soft Guidance for 2025; Reduction of Investment Units
- Companies Should Consider All Options, Not Just Maintaining Their Listing
Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF
- On Friday after the close, Japan Eyewear Holdings (5889 JP) made a short announcement that it would cancel its equity offering and TSE Prime application announced 10 Feb, discussed here.
- I had suggested that the offering price, or a large dip would be a buy. I rescind that recommendation immediately.
- The reason for the cancellation? “Matters that need to be confirmed in relation to our internal control system have been discovered and that will take time.”
(Mostly) Asia-Pac M&A: Paragon REIT, Kaonavi, Arcadium Lithium, Sun Art Retail, HKBN, and Seven & I
- I tally 59 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- Two new deals discussed this week: Paragon REIT (PGNREIT SP) and Kaonavi Inc (4435 JP).
- Key updates/news took place on: Arcadium Lithium (LTM AU), Sun Art Retail (6808 HK), HKBN Ltd (1310 HK), and Seven & I Holdings (3382 JP).
Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer
- Zenhoren (5845 JP) announced a partial tender offer and capital and business agreement from Mitsubishi UFJ Financial (MUFG) (8306 JP). MUFG aims to make Zenhoren a consolidated subsidiary.
- The offer is for a minimum of 11.7m shares (44.36% ownership ratio) and a maximum of 13.0m shares (49.55% ownership ratio) at JPY1,000, a 31.9% premium to the last close.
- Due to the irrevocable, the minimum acceptance condition requires a minority acceptance rate of 16.6%. This threshold is achievable, as the offer is reasonable.
Last Week in Event SPACE: Trend Micro, Furukawa, Melco, Ingenia/Lifestyle
- Reportedly buyout firms are “vying for” Trend Micro Inc (4704 JP). The stock went limit up today. Again. The stock is now getting to the expensive side.
- Furukawa (5715 JP) has changed their capital allocation policy for the third time. The company is a cyclical, and will likely always suffer the indignity of a cyclical multiple.
- While it often pays to follows where the family invests when assessing holdco structures, Melco International (200 HK)‘s NAV discount is simply too narrow for a simple holding company structure.
Otsuka Holdings (4578 JP): Soft Guidance for 2025; Reduction of Investment Units
- For 2025, Otsuka Holdings (4578 JP) is looking for 2% YoY revenue growth to ¥2,380B. However, net profit is expected to decline 20% YoY to ¥275B.
- Even upon a massive impact from LoE of Jinarc/Jynarque, total revenue will grow in 2025. Excluding one-time of impact of the tax adjustments, 2025 net profit guidance implies 6% growth.
- Otsuka intends to reduce buyback to create a more investable environment, encourage individual investors to participate in the market, and revitalize the stock market.
Companies Should Consider All Options, Not Just Maintaining Their Listing
- Besides not showing concrete measures to increase corporate value, the feasibility of the plan and the valuation at that time are often not verified, so disclosures that don’t add up.
- Listed subsidiaries and equity method affiliates account for 31.8% of all listed companies. The company is still in the process of restructuring its business portfolio.
- The growth of each company’s corporate value and stock market capitalization will be determined by how quickly issues that have not been initiated so far are resolved.
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