In today’s briefing:
- Toyo Construction (1890 JP): Taisei (1801 JP)’s Bittersweet Tender Offer
- (Mostly) Asia-Pac M&A: Technopro, Infomedia, Kolon Mobility, Iress, HKBN, Furukawa Battery
- Ashimori Industry (3526 JP): Toyoda Gosei (7282 JP)’s Tender Offer at JPY4,140
- The Ratio of Fixed Compensation in Executive Compensation Has Gradually Declined, but Remains High
- Sanki Engineering (1961 JP): Q1 FY03/26 flash update
- Kringle Pharma Inc (4884 JP): Q3 FY09/25 flash update
- Medical System Network Co (4350 JP): Q1 FY03/26 flash update
Toyo Construction (1890 JP): Taisei (1801 JP)’s Bittersweet Tender Offer
- Toyo Construction (1890 JP) has recommended a tender offer from Taisei Corp (1801 JP) at JPY1,750, a 6.4% premium to the last close of JPY1,644.
- Unusually, Taisei has set the lower limit of the tender plus irrevocables at a 55.43% ownership ratio, below the two-thirds EGM share consolidation vote threshold.
- Despite the low premium, this is a done deal due to irrevocables from the two previous competing bidders (INFRONEER Holdings (5076 JP), YFO), who are also the two largest shareholders.
(Mostly) Asia-Pac M&A: Technopro, Infomedia, Kolon Mobility, Iress, HKBN, Furukawa Battery
- I tally 41 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
- Five new deal was discussed on Smartkarma this week: Infomedia Ltd (IFM AU),Ci Medical (3540 JP), Soft99 Corp (4464 JP), Technopro Holdings (6028 JP), and Kolon Mobility (450140 KS).
- Key updates/news took place on Iress Ltd (IRE AU), PointsBet Holdings (PBH AU), HKBN Ltd (1310 HK), Tourism Holdings (THL NZ), and Furukawa Battery (6937 JP).
Ashimori Industry (3526 JP): Toyoda Gosei (7282 JP)’s Tender Offer at JPY4,140
- Ashimori Industry (3526 JP) has recommended a tender offer from Toyoda Gosei (7282 JP) at JPY4,140, a 43.8% premium to the last close.
- The offer is attractive as it represents a ten-year high, implies a P/B of 1.00x and above the mid-point of the target IFA DCF valuation range.
- Despite the lack of irrevocables, the shareholder register facilitates deal completion. The tender runs from 12 August to 24 September, with payment from 30 September.
The Ratio of Fixed Compensation in Executive Compensation Has Gradually Declined, but Remains High
- As global companies changing to increase the proportion of variable compensation from the perspective of securing human resources, the proportion of fixed compensation is gradually declining, but still high.
- Since only executives who receive compensation of 100 million yen or more are required to be disclosed in annual securities reports, few companies disclose the compensation of all directors individually.
- In addition to the inability to verify whether the remuneration paid was appropriate, investors have doubts about the independence of the process by which the Remuneration Committee determines executive remuneration.
Sanki Engineering (1961 JP): Q1 FY03/26 flash update
- Q1 FY03/26 orders decreased 2.6% YoY to JPY68.9bn, while order backlogs increased 4.0% YoY to JPY229.9bn.
- Consolidated revenue rose 2.5% YoY to JPY49.7bn, driven by a 14.0% increase in Industrial HVAC revenue.
- Gross profit surged 23.5% YoY to JPY8.9bn, with a record-high gross profit margin of 17.8%, improving by 3.0pp.
Kringle Pharma Inc (4884 JP): Q3 FY09/25 flash update
- Revenue and gross profit for cumulative Q3 FY09/25 were JPY54mn, down 12.4% YoY, with SG&A expenses up 23.6%.
- Operating, recurring, and net losses increased YoY, with operating loss at JPY739mn, compared to JPY580mn prior year.
- Current assets decreased by JPY672mn due to R&D expenses, while fixed liabilities rose by JPY140mn from end-FY09/24.
Medical System Network Co (4350 JP): Q1 FY03/26 flash update
- Q1 FY03/26 sales rose 5.7% YoY to JPY31.1bn, but net income dropped 54.1% YoY to JPY78mn.
- Segment sales increased 6.5% YoY to JPY29.9bn, with segment profit rising 0.4% YoY to JPY1.1bn.
- Full-year FY03/26 forecast predicts sales of JPY125.5bn and net income of JPY1.3bn, up 3.0% YoY.
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