In today’s briefing:
- [Japan M&A] Nippon Sheet Glass (5202) Done, Dusted, Arb for Money
- [Japan M&A] EQT Bumps Kakaku Bid to ¥3,680 – Through Bain’s Bid – Means Bain Bid Likely Soon
- Kakaku.com (2371 JP): No Messing Around as EQT/DG Goes with a JPY3,680 Offer
- Kioxia (285A JP: The Cycle Is Intact, 100% Pre-Sold NAND, Gen.10 on Track and a 3-For-1 Split
- Seiko (8050 JP) & Citizen (7762 JP): The Yen Trade Reverses — Sell Seiko, Reduce Citizen
- Japan’s Gas Stations Are Dying. This Company Sells Them a Way Out.
- Kyowa Kirin (4151 JP): 1H26 Revenue Grow on North America, EMEA; Guidance Reiterated
- [Japan M&A] MBK Wins Auction for Sharingtechnology (3989 JP) At ¥1,550/Share – Looks Clean
- Sojitz (2768 JP) Vs ENEOS (5020 JP): Proven Pair Hits Trigger Again
- Simply Aiming to Reduce Cash on Hand Is Dangerous—a Shift in Mindset Is Needed
[Japan M&A] Nippon Sheet Glass (5202) Done, Dusted, Arb for Money
- Nippon Sheet Glass (5202 JP) announced 21-Aug that the capital injection expected a fair bit later would be done and paid for on 31-Aug. New term loans were agreed 26-Aug.
- That made 25 Sep the last trading day. On the 31st, they confirmed the capital injection had been paid for. Cash out for remaining shareholders would be late December 2026.
- Actual dates and confirmation waits until early November but buy today and that is 4.0% annualised (though the BOJ could act twice in the interim). Worth a look for arbs.
[Japan M&A] EQT Bumps Kakaku Bid to ¥3,680 – Through Bain’s Bid – Means Bain Bid Likely Soon
- Today, on the last day of the earlier bump to ¥3,571 by EQT/DG, which was bumped from ¥3,570 (when shares were trading ¥3,700) and extended, EQT bumped/extended to ¥3,680/share.
- This is, of course, a bit more than 1% higher than the existing Bain best bid and the level Oasis had set as a minimum – ¥3,640.
- EQT tried to get Oasis to sign on but they did not agree. They are waiting for Bain’s overbid I expect. This now puts the floor at ¥3,680.
Kakaku.com (2371 JP): No Messing Around as EQT/DG Goes with a JPY3,680 Offer
- EQT/Digital Garage (4819 JP) revised its Kakaku.com Inc (2371 JP) offer to JPY3,680, a 3.1% premium to the previous JPY3,571 offer and a 4.5% premium to Bain/LY’s JPY3,520 base offer.
- Bain/LY (4689 JP)’s “wait and let EQT/DG fail” play has been undercut as it marks the first time that EQT/DG has exceeded Bain/LY’s conditional offer (KDDI agrees to share buyback).
- While the buyout economics have eroded, Bain/LY is likely to return with one final revised offer (possibly a base offer of JPY3,754 and a conditional offer of JPY3,880).
Kioxia (285A JP: The Cycle Is Intact, 100% Pre-Sold NAND, Gen.10 on Track and a 3-For-1 Split
- Kioxia is down 37.8% since initiation despite 100% of 2026 NAND capacity being pre-sold and BiCS Gen.10’s 20% cost-per-bit reduction remaining on track.
- The 1 October 3-for-1 split, Gen.10 margin data and Flash Ventures capacity confirmation provide three catalysts to close Kioxia’s valuation gap.
- We remain BULLISH with FV of ¥72,000 pre-split (¥24,000 post-split), based on 12× FY2027E EPS of ¥6,000, implying 25.6% upside.
Seiko (8050 JP) & Citizen (7762 JP): The Yen Trade Reverses — Sell Seiko, Reduce Citizen
- Seiko has tripled YTD as Grand Seiko accelerates and the yen weakened, but USDJPY has fallen to 153.7 from 164 — reversing the currency tailwind.
- At 27.7x guidance EPS, Seiko faces multiple risk rather than earnings collapse; Citizen carries greater FX sensitivity but its ¥199/share net cash provides a floor.
- We rate Seiko SELL, FV ¥6,400 based on 20x FY3/27E stressed EPS of ¥319; Citizen is REDUCE at ¥1,940 on 17x stressed EPS.
Japan’s Gas Stations Are Dying. This Company Sells Them a Way Out.
- A KeePer coating is a thin glass film that goes onto car paint.
- The cheapest one, Crystal KeePer, takes a couple of hours and costs ¥18,200, about $117, on a small car.
- The most expensive, W Diamond KeePer, takes most of a day and costs ¥108,000, about $690, on a large one.
Kyowa Kirin (4151 JP): 1H26 Revenue Grow on North America, EMEA; Guidance Reiterated
- Kyowa Kirin Co Ltd (4151 JP) posted 14% revenue growth in 1H26. Core operating margin expands expanded on lower SG&A and R&D expense.
- Kyowa Kirin reiterated 2026 guidance. They expect revenue to be ¥520B and core operating profit to be ¥130B. Company expects to end the year with a core profit of ¥103B.
- Kyowa Kirin needs new drugs to augment growth. It remains highly dependent on Crysvita. Ziftomenib, infigratinib will drive revenue numbers in medium to long term.
[Japan M&A] MBK Wins Auction for Sharingtechnology (3989 JP) At ¥1,550/Share – Looks Clean
- Sharingtechnology Inc (3989 JP) popped sharply after a Mergermarket article in late June. It went up 40% then climbed through July and August.
- The company was up for auction and there were multiple bidders in the First Round. It went to a second in July-August and only MBK bid.
- Activist AVI asked for a little more (holds bowl out Oliver-style) and got it. This looks done to me, even if it feels a bit light in aspiration.
Sojitz (2768 JP) Vs ENEOS (5020 JP): Proven Pair Hits Trigger Again
- Context: The Sojitz Corp (2768 JP) vs. ENEOS Holdings (5020 JP) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlight: Going long Sojitz Corp (2768 JP) and short ENEOS Holdings (5020 JP) targets a 6% return.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
Simply Aiming to Reduce Cash on Hand Is Dangerous—a Shift in Mindset Is Needed
- When shareholders have a certain degree of influence through voting rights, management should be expected to conduct operations with discipline and accountability through dialogue with shareholders.
- Simply aiming to reduce cash reserves is risky. The problem with Japanese companies is a lack of awareness that mission is to maximize shareholder interest and sustainably grow corporate value.
- This revision to the Corporate Governance Code may have given investors mixed signals regarding the ongoing formalization—and potential regression—of corporate governance at Japanese companies.
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