In today’s briefing:
- [Japan ECM] Kokusai Elec (6525) Offering – Expect It Very Well Bid, and the Back End Squeezy
- Toyota Industries (6201 JP): Vocal Activism Gathering Pace
- Kokusai Electric (6525 JP): Small Index Impact for Now, but Could Lead to Something Bigger
- Kokusai Electric Placement – Well Flagged but past Deal Didn’t Do Well
- Kokusai Electric (TSE: 6525) – KKR’s Secondary Sale Marks Typical PE Exit
[Japan ECM] Kokusai Elec (6525) Offering – Expect It Very Well Bid, and the Back End Squeezy
- After the close today, Kokusai Electric (6525 JP) announced that large holder (and original PE owner) KKR HKE Investment LP would sell down 30mm shares or 12.88% of shares out.
- This is not expected, but also not unexpected – it’s exactly a year since the first selldown. There is a decent-sized short position, and it isn’t a huge offering.
- This changes two aspects of the future supply/demand balance. Both are important for how this trades in coming months.
Toyota Industries (6201 JP): Vocal Activism Gathering Pace
- Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan is susceptible to a bump if there is enough vocal opposition from minorities.
- In July, two public pieces have sharply criticised the offer – the Asian Corporate Governance Association (ACGA) on 2 July and Sloane Robinson Investment Management on 8 July.
- Some of the criticism has merit, while others do not. Nevertheless, these letters are the first and right step to agitate for terms that are closer to TICO’s intrinsic value.
Kokusai Electric (6525 JP): Small Index Impact for Now, but Could Lead to Something Bigger
- KKR HKE Investment is offering 30m shares (12.86% of shares out) of Kokusai Electric (6525 JP) in a secondary offering that could raise up to JPY 91bn (US$620m).
- Applied Materials (AMAT US) will become the largest shareholder in Kokusai Electric (6525 JP) after the placement.
- There will not be a lot of buying from passive trackers following the placement, but it could ease the way for inclusion of the stock in the Nikkei 225 Index.
Kokusai Electric Placement – Well Flagged but past Deal Didn’t Do Well
- KKR is looking to raise approximately US$620m through an accelerated secondary offering for around 13% of Kokusai Electric (6525 JP)‘s (KE) stock.
- KKR had sold in the IPO and undertaken an extended selldown in July 2024 as well. Hence, this deal is somewhat well flagged.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Kokusai Electric (TSE: 6525) – KKR’s Secondary Sale Marks Typical PE Exit
- On July 9, 2025, KKR announced it would reduce its stake in Kokusai Electric from ~23.5% to ~10.6% through a ¥90 billion overnight secondary offering.
- KKR’s move reflects a classic private equity monetization strategy following operational improvements and a successful IPO.
- While the sale caused a modest short-term share reaction (~2% dip), such liquidity events rarely impact long-term value—fundamentals remain the key driver for patient investors.
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