In today’s briefing:
- Seven & I Holdings (3382 JP): The MBO Is Still Alive and Kicking
- “Danger Past, God Forgotten” How Long Will the Effect of TSE’s Request Last?
- EQD | Nikkei Index Options Weekly – January 06 – 10
Seven & I Holdings (3382 JP): The MBO Is Still Alive and Kicking
- On 10 January, Bloomberg reported that Apollo is considering an equity commitment of JPY1.5 trillion in the Seven & I Holdings (3382 JP) MBO.
- Securing financing is a key challenge for the MBO. Apollo’s involvement suggests a shift to a higher mix of equity vs debt, which should ease concerns about securing debt financing.
- The article suggests that the MBO valuation could be lower than previously reported. However, 7&i’s underlying value supports a JPY8 trillion MBO valuation (market cap).
“Danger Past, God Forgotten” How Long Will the Effect of TSE’s Request Last?
- The improvement in ROA was not as large as that of ROE, which raises concerns that the improvement in profitability may be running out of steam.
- Improvements in corporate governance in 2024 were even lower than in 2023. The repetitive loss of enthusiasm after danger past is seen in % Independent Directors, Nomination/Compensation Committee, etc.
- The reason why stock valuations little increased despite Foreign Ownership’s 2024 increase might have to do with the fact that improvements in corporate governance have not spread to all companies.
EQD | Nikkei Index Options Weekly – January 06 – 10
- Weak price action to start the year for the Nikkei with little direction from USD/JPY which was grinding higher throughout the week.
- Volatility at the start of the week helped push short term historic vol higher with at-the-money implied vol up about 1 point.
- Volumes picked up substantially over year-end levels with Puts making up 53.5% of all contracts traded.
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