In today’s briefing:
- [Japan Event] Potentially Interesting Dynamics of Post-Tender NTT Data (9613) Trading. $8bn+ One Way
- [Japan Event] Seven Bank (8410) To Buy Back Up to 17.0% of Shares Out Tomorrow
- Nippon Steel (5401 JP) – No Rival, No Discount, Limited Control
- Nippon Building Fund Placement – Small Deal but Lacks Accretion
- Allegro MicroSystems: China-for-China Strategy to Harness Growth In One Of The World’s Largest Semiconductor Markets!
- Olympus Corp (7733 JP): Forex Holds FY25 Together; FY26 Guidance Does Not Offer Much Respite
[Japan Event] Potentially Interesting Dynamics of Post-Tender NTT Data (9613) Trading. $8bn+ One Way
- The NTT Data Corp (9613 JP) Tender Offer closed today. Results will come out tomorrow. I expect it will have been successful.
- That will mean some US$8bn+ of passive tracking flows to sell and $8bn+ to buy related to this event alone in the next 3 months.
- And there are some very interesting dynamics to consider in the meantime.
[Japan Event] Seven Bank (8410) To Buy Back Up to 17.0% of Shares Out Tomorrow
- Today after the close, Seven Bank Ltd (8410 JP) announced a MASSIVE ToSTNeT-3 transaction to buy back up to 200,000,000 shares (17.0% of shares out) for ¥52.4bn. Tomorrow AM.
- There is a complex iterative calculation on the part of Seven Eleven Japan to figure out how many shares they should put into the buyback.
- I see a minimum buyback of 10.8%. 17% would be great. But there is a potential issue on the back end of which investors should be aware.
Nippon Steel (5401 JP) – No Rival, No Discount, Limited Control
- Nippon paid full price despite governance restrictions; with no credible rival, rejecting the golden share risked collapsing the deal.
- Historical golden share precedents imply 10–20% valuation discounts, yet Nippon accepted late-stage constraints without renegotiation.
- Funding mix includes bridge loans, hybrids, and asset sales, but proposed equity issuance near 40% below book risks EPS dilution and undermines capital discipline messaging.
Nippon Building Fund Placement – Small Deal but Lacks Accretion
- Nippon Building Fund (8951 JP) is looking to raise around US$122m in its Primary Offering, to fund the acquisition of Frontier Musashikosugi N Building and S Building.
- Unusually for Japan, the acquisition was announced at the end of last month, while the raising has only been announced today.
- In this note, we talk about the deal dynamics and run the deal through our ECM framework.
Allegro MicroSystems: China-for-China Strategy to Harness Growth In One Of The World’s Largest Semiconductor Markets!
- Allegro MicroSystems has reported its financial results for the fourth quarter and the full fiscal year 2025.
- The company is focused on strengthening its market position through innovation and operational efficiencies.
- President and CEO Mike Doogue, who ascended from being the company’s first Chief Technology Officer, emphasized a strategic focus on expanding product capabilities and extending Allegro’s footprint in lucrative markets such as automotive, industrial, and emerging sectors like medical and robotics.
Olympus Corp (7733 JP): Forex Holds FY25 Together; FY26 Guidance Does Not Offer Much Respite
- Olympus Corp (7733 JP) witnessed revenue grow 8% YoY to ¥997B (3% on Fx neutral basis) in FY25, driven by both the Endoscopic Solutions and Therapeutic Solutions divisions.
- North America sales growth continues to be favorable in warding off the decline faced in China. GI Endoscopy (55% of ESD revenue) witnessed its revenue grow 8% to ¥350B.
- Olympus guided FY26 revenue to be flat YoY at ¥999B. R&D expenses are expected to rise, scarring the margins. Adjusted operating profit margin is expected to be 17.5% (FY25: 18.9%).
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