In today’s briefing:
- Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t
- [Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable
- Tryt (9164 JP): Carlyle’s JPY880 Tender Offer Is a Done Deal
- Nikkei 225 Tactical Outlook Amidst Sony Corp’s Financial Group Spin-Off Talks
- Kitazato IPO – Isn’t Particularly Enticing Apart from the Dividend Yield
- Poletowin Pitcrew Holdings (3657 JP): Q1 FY01/26 flash update
- Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell
Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t
- A couple of years ago, Sony Corp (6758 JP) announced they would spin off Sony Financial Holdings (8729 JP) (called Sony Financial Group Inc). That spinoff is due in Sep-2025.
- The extra capital required for a tech/industrial to hold the financial business is significant, but some of the other reasons Sony has offered are just management-speak hogwash.
- The problem? It creates a new event in the Nikkei 225 paradigm for which there was no rule. Now the Nikkei has proposed a rule. It isn’t perfect.
[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable
- In early February, articles suggesting the PE owner of TRYT (9164 JP) wanted to cash out. Performance post-IPO had been bad. Catching up to the IPO price would be tough.
- But a second round of bidding came about, so the stock went limit up. Then it settled in the ¥480 range for three weeks. Then started to climb.
- Now the company and its PE firm owner have announced a sale to a new PE Firm at ¥880/share. This is below IPO Price but it will get done.
Tryt (9164 JP): Carlyle’s JPY880 Tender Offer Is a Done Deal
- TRYT (9164 JP) has recommended a tender offer from Carlyle Group / (CG US) at JPY880, a 34.6% premium to last close and a 135.3% premium to the undisturbed price.
- Despite 26.7% below the IPO price, the offer is attractive compared to peer multiples and is above the mid-point of the IFA DCF valuation range.
- The chance of a competing proposal is low, as Carlyle’s offer was the highest in the auction. EQT has provided an irrevocable (60.00% ownership ratio), which ensures a done deal.
Nikkei 225 Tactical Outlook Amidst Sony Corp’s Financial Group Spin-Off Talks
- The Nikkei 225 (NKY INDEX) is currently rallying after a modest pullback last week.
- The index went above our model resistance level at 38347 (50% prob. of reversal). It’s modestly overbought and could go higher.
- News can perturbate the trajectory of the index but at the moment the Nikkei seems directed towards higher prices: 39216 is our profit target for this rally, before Jun 27th.
Kitazato IPO – Isn’t Particularly Enticing Apart from the Dividend Yield
- Kitazato (368A JP) manufactures and sells medical devices and products for fertility treatment. It aims to raise around US$130m in its Japan IPO.
- Kitazato specializes in artificial insemination, in vitro fertilization, cell cryopreservation and reproductive engineering technologies in regenerative medicine.
- In our previous note, we looked at its past performance and other deal dynamics that might impact the listing. In this note, look at the firm’s valuation.
Poletowin Pitcrew Holdings (3657 JP): Q1 FY01/26 flash update
- Revenue increased by 6.7% YoY to JPY12.8bn, with all business segments posting profit growth despite some challenges.
- The company posted an operating loss of JPY22mn, significantly better than the forecasted JPY236mn loss for 1H.
- Recurring profit was JPY481mn, with a foreign exchange loss of JPY434mn due to yen appreciation against the USD.
Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell
- Kioxia Holdings (285A JP) raised around US$800m (including over-allocation) in its Japan IPO, after pricing its IPO in the middle of its range. Its IPO linked lockup will expire soon.
- Kioxia is a manufacturer and a global leader in flash memory and solid state drives for smartphones, PCs, enterprise servers and data centers.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
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