In today’s briefing:
- [Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
- Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected
- [Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
- Toyota Motor (7203 JP) Tactical View: Privatization Momentum Builds — Ready to Rally?
- Reasons Why the TSE’s Request to “improve IR System” Seems to Be Ineffective This Time
- StubWorld: Toyota Industries/Motors, GMO Internet
- Matsuya’s Record Sales May Signal Peak for Sector
- Kaken Pharmaceutical (4521 JP): Bleak FY26 Ahead, No Immediate Respite In Sight
[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
- Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
- In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
- I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now.
Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected
- Kyodo news agency reported that Toyota Industries (6201 JP) plans to accept a tender offer by Toyota Motor (7203 JP) and Toyota Chairman Akio Toyoda, potentially in May or June.
- The Nikkei reported that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline.
- These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.
[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
- On 9 May Mitsubishi Logisnext Co., Ltd. (7105 JP) delayed earnings by 30 minutes. Shares popped. Then earnings were released, no deal, and shares crashed. Now they are rebounding.
- But they remain volatile and subject to dips like the one this AM -5% at one point. Fears may be due to the idea that first smoke here was Dec-2024.
- 5 months later, no deal yet. Bids were due pre-earnings but with tariffs and writedowns, one wonders if bidders were waiting for results.
Toyota Motor (7203 JP) Tactical View: Privatization Momentum Builds — Ready to Rally?
- Since April 28th we traced a path for Toyota Motor (7203 JP)‘s stock price, first here (forecast: going down) and then here (forecast: potential 2-week pullback to 2578).
- Last week Toyota Motor (7203 JP)pulled back to 2598 (pretty close to our 2578 target). The stocks closed down for 2 weeks, as predicted. A rally may be starting.
- Rumors of an acceleratingof privatization bid for Toyota Industries (6201 JP)could act as a fresh catalyst for the stock—aligning with our model’s forecast from May 8th.
Reasons Why the TSE’s Request to “improve IR System” Seems to Be Ineffective This Time
- TSE plans to mandate the development of IR system, but since most companies disclosed that they have already taken action, fewer companies will move to do something from now on.
- Analysis of IR disclosure and stock valuations showed that IR disclosure scores did not differ among the five groups of companies by percentage change in Tobin’s Q.
- The fact that many companies haven’t been able to provide capital profitability and management strategies that investors seek has led to reluctance to hold briefings to communicate with overseas investors.
StubWorld: Toyota Industries/Motors, GMO Internet
- Given recent – and ongoing developments – with Toyota Industries (6201 JP) and GMO Internet (4784 JP), I’m revisiting my NAVs.
- Preceding my comments on the Toyota Group and GMO, are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Matsuya’s Record Sales May Signal Peak for Sector
- Matsuya Co Ltd (8237 JP) had a terrific FY2024, posting a new sales record at its Ginza store, the first since 1992.
- There are worries that this year or next will be the peak given the ongoing decline in sales to locals, and if a strengthening Yen puts paid to tourist largesse.
- The same headwinds are hitting all the major department store firms, including Isetan Mitsukoshi Holdings Ltd (3099 JP),Takashimaya (8233 JP) and J Front Retailing (3086 JP).
Kaken Pharmaceutical (4521 JP): Bleak FY26 Ahead, No Immediate Respite In Sight
- Kaken Pharmaceutical (4521 JP) witnessed 31% YoY revenue growth in FY25 to ¥94 billion on the back of flurry of one-time upfront payments, resulting in surge in profits too.
- Kaken’s major drug Clenafin saw revenue drop of 2% YoY to ¥17 billion on patent cliff, while Artz revenue grew 6% YoY to ¥19 billion.
- For FY26, Kaken expects revenue to fall 6% to ¥88 billion. No respite from immediate pangs of revenue loss from NHI drug price revision and generic competition for top-selling products.
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