In today’s briefing:
- [Japan M&A] Mandom (4917 JP) MBO – Light Price, Open-Ish Register, Tough to Take Over, Could Do Fun
- Fuji Oil (5017 JP): Idemitsu Kosan (5019 JP)’s Tender Offer at JPY480
- [Japan M&A] Digital HD (2389 JP) MBO Takeunder Is Optically Bad, A Little Light, But Tough to Beat
- China’s Tire Sector Shifts To Next Gear In Global Consolidation
- How Long Can a Model Where Profit Is Helped by Low Growth in Labor Cost and Depreciation Continue?
- GiG Works (2375 JP): Q3 FY10/25 flash update
- i-mobile Co Ltd (6535 JP): Full-year FY07/25 flash update
- Milbon Co., LTD (4919 JP): Research Update – 11 SEPTEMBER 2025
[Japan M&A] Mandom (4917 JP) MBO – Light Price, Open-Ish Register, Tough to Take Over, Could Do Fun
- On 10 September, the founding Nishimura family, the PE Firm CVC, and Mandom Corp (4917 JP) agreed that the first two could take over the latter at 4.9x Mar28 EBITDA.
- A cocktail napkin calculation of expected leverage suggests the equity check is buying this at 5x average Mar27-28 free cash flow. That’s cheap for a growing company.
- The register is open enough to cause problems but not open enough to allow a clean hostile bid by a strategic. But still open enough for someone to have fun.
Fuji Oil (5017 JP): Idemitsu Kosan (5019 JP)’s Tender Offer at JPY480
- Fuji Oil Co Ltd (5017 JP) has recommended a tender offer from Idemitsu Kosan (5019 JP) at JPY480, a 44.1% premium to the last close.
- While the offer implies a P/B of 0.54x, it is reasonable as it is above the midpoint of the IFA DCF valuation range and at a premium to historical ranges.
- Nevertheless, the offer is susceptible to a bump as it is far from a knockout bid, and Fuji Oil previously had activists on the register.
[Japan M&A] Digital HD (2389 JP) MBO Takeunder Is Optically Bad, A Little Light, But Tough to Beat
- On 11 Sep 2025 after the close, Hakuhodo Dy Holdings (2433 JP) announced a takeunder of Digital Holdings Inc (2389 JP) in MBO form.
- Two major holders with 37% roll their stakes into new ownership in Hakuhodo Dy Holdings (2433 JP) and another 17+% probably just fall in line.
- Foreigners hold a lot. They may not like the takeunder. It is not clear who would buy this if Hakuhodo does not, or whether it is worth the hassle.
China’s Tire Sector Shifts To Next Gear In Global Consolidation
- Sailun revives Bridgestone’s idle TBR plant, breaks ground in Egypt
- Chinese pneumatic tire exports climb 4.6% in value in H1 2025
- Jiangsu General ramps up projects in Thailand and Cambodia
How Long Can a Model Where Profit Is Helped by Low Growth in Labor Cost and Depreciation Continue?
- As lack of investment, including in human capital, is recognized as a factor behind the lack of growth, there’re plans to enhance disclosure of human capital in annual securities reports.
- While labor share of large companies has fallen 1.3 ppt over the past year, OP margins increased only 0.3 ppt. It’s necessary to produce products with high gross profit margins.
- Unable to make bold investments to create higher added-value products, companies instead use cash-flows for shareholders return without increasing cash reserves, resulting in high level of cash on hand.
GiG Works (2375 JP): Q3 FY10/25 flash update
- GiG Works reported a recurring loss due to lower YoY revenue and JPY107mn in crypto asset valuation losses.
- System Solutions and Sharing Economy businesses saw YoY revenue and profit increases, while On-demand Economy declined.
- Revenue from shared office services grew 23.5% YoY, with registered members increasing by 32.9% YoY.
i-mobile Co Ltd (6535 JP): Full-year FY07/25 flash update
- In FY07/25, the company reported revenue of JPY21.5bn (+14.9% YoY) and operating profit of JPY4.1bn (+16.5% YoY).
- The Consumer Service segment’s FY07/25 revenue was JPY19.1bn (+19.5% YoY), with a segment profit of JPY4.0bn (+16.7% YoY).
- For FY07/26, the company projects revenue of JPY22.0bn (+2.2% YoY) and operating profit of JPY4.5bn (+8.9% YoY).
Milbon Co., LTD (4919 JP): Research Update – 11 SEPTEMBER 2025
- Milbon Co., Ltd (4919 JP) reported FY25 (Dec year-end) 1H earnings with a gross profit [GP] of ¥15,502mil (-1.6% YoY) and operating profit [OP] of ¥1,938mil (-39.0% YoY) on sales of ¥24,807mil (+1.1% YoY).
- RP declined -44.3% YoY to ¥1,853mil, due mainly to net FOREX losses (-¥120mil).
- The 1H results fell short of the firm’s sales and OP guidance by -4.2% and -31.0%, respectively due to (1) a decline in GP due to weaker-than-expected sales (-¥707mil) and (2) the deterioration of the GPM on the back of inventory valuation losses (approx. -¥454mil).
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