In today’s briefing:
- [Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
- [Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
- Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
- (Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin
- Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues
- Zozo Purchase of Lyst Is Timely
[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
- Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs.
- Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
- Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still.
[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
- Buybacks in Japan are becoming a much greater driver of shareholder return than in previous years. The total amount of buybacks announced just during the March-end earnings season cleared ¥7trln.
- Quiddity has developed a buyback tool which tracks Japanese buybacks and the buyback history for any given company. Isuzu Motors (7202 JP) announced a big post-Offering buyback this week.
- Want to see how Isuzu has executed buybacks the past decade? Daily data? % volume? You can check here for any of the 21 companies which announced buybacks this week.
Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Mayne Pharma (MYX AU), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smartpay Holdings (SPY NZ), Smart Share Global (EM US).
- Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Spartan Resources (SPR AU), Nissin Corp (9066 JP), Torii Pharmaceutical (4551 JP), Nippon Road (1884 JP).
(Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin
- For May 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma (by the Quiddity team) with an overall announced deal size of ~US$27bn.
- The average premium for the new transactions announced (or first discussed) in May was ~28%, with a year-to-date average of 49%.
- The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31%.
Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues
- While offering non-serious TOB prices, knowing that the likelihood of TOBs by the activist fund is low, the aim to extract concessions from the REIT and sponsor companies was successful.
- The governance problem is the composition of the company, which continues to manage off-balance sheet real estate through its subsidiary REIT asset management company.
- So far, however, governance issues have not received much attention, only confirming the sponsor companies’ willingness to continue REIT control and investors’ benefit from higher REIT stock prices by TOBs.
Zozo Purchase of Lyst Is Timely
- Zozo’s purchase of UK mall Lyst will create significant synergies, allowing Zozo to build a strong base in Europe and the US.
- The move will allow brands from Japan to sell overseas easily, while also potentially making it simple for European and US brands to sell into Japan.
- The deal comes just in time given slowing e-commerce sales in Japan.
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