In today’s briefing:
- Tsuruha (3391), Welcia (3141), and Aeon (8267) Do a Deal, Short-Changing Tsuruha Minorities
- “Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)
- Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX
- Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set
- Weekly Deals Digest (13 Apr) – Suzuki, Canvest, Fengxiang, HKBN, Goldlion, Tsuruha/Welcia, Shibaura
- Nippon Parking Development (2353 JP): Irreplaceable Assets with +12% Historical EPS CAGR at 13x P/E
- Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor
- Nikkei Index Options Weekly (Apr 07 – 11): Vol Spikes, Skew Steepens, Macro Shifts Unfold
Tsuruha (3391), Welcia (3141), and Aeon (8267) Do a Deal, Short-Changing Tsuruha Minorities
- On Friday, Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced the Tsuruha/Welcia merger and Partial Tender to get Aeon to 50+% of NEWCO.
- The scrip ratio short-changes Tsuruha shareholders. The subsequent partial offer to raise Aeon’s stake above 50% is low too. 9.7% shareholder Orbis is already out with a complaint.
- But… all is not lost. There are some interesting angles here to complain.
“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)
- In an announcement after the close Friday 11 April, Aeon Co Ltd (8267 JP) and AEON Mall (8905 JP) announced their merger ratio, and timing.
- The ratio is 0.65 to 1.0, meaning Aeon Mall shareholders don’t get a lot of credit for their real estate. The timing is short-dated. The AGM is end-May. Merger July1.
- This may be a tad light, but it is a done deal. Active shareholder base is almost all retail and crossholders+dom passive gets Aeon to 70%.
Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX
- Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to raise US$1.2bn by offloading their entire stakes in Suzuki Motor by way of a secondary offering.
- Suzuki Motor (7269 JP) stock is flat since the announcement of the placement but has underperformed its peers and the TSE Tokyo Price Index TOPIX (TPX INDEX).
- With the placement being less than 5% of the number of shares outstanding, there is unlikely to be any immediate passive inflow which could pressure the stock.
Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set
- AEON Mall (8905 JP) announced a share exchange offer by Aeon Co Ltd (8267 JP) at 0.65 Aeon shares per Aeon Mall share, a 30.9% premium to the undisturbed price.
- The share exchange ratio is reasonable compared to historical price ratios and IFA valuation ranges. The implied offer multiple is attractive compared to peer multiples.
- Aeon’s 58.16% shareholding ensures that Aeon Mall’s vote on 22 May is low-risk. The share exchange’s effective date is 1 July.
Weekly Deals Digest (13 Apr) – Suzuki, Canvest, Fengxiang, HKBN, Goldlion, Tsuruha/Welcia, Shibaura
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Suzuki Motor (7269 JP) secondary offering; DN Solutions (298440 KS), Chagee Holdings (CHA US) and LG Electronics India (123D IN) IPOs.
- Event-Driven developments: Canvest, Shandong Fengxiang (9977 HK), HKBN Ltd (1310 HK), Goldlion Holdings (533 HK), Tsuruha Holdings (3391 JP), Shibaura Electronics (6957 JP), Abacus Storage King (ASK AU).
Nippon Parking Development (2353 JP): Irreplaceable Assets with +12% Historical EPS CAGR at 13x P/E
Nippon Parking Development (2353 JP — US$477 million) — also known as “NPD” — is a Japanese lessor of parking spaces and an operator of ski resorts and theme parks.
It’s the brainchild of lifelong entrepreneur Kazuhisa Tatsumi, who literally built the company in his garage in the early 1990s.
In Japan, developers are generally required to build 1/3 parking space per 100 square meters of floor area for any large building. This is known as “legally mandated parking space”.
Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor
- Adastria (soon to be And ST) is Japan’s biggest multi-chain clothing retailer and fourth largest overall.
- As well as investing in core brands like Global Work, the former wholesaler is now expanding through new segments – including Forever 21 despite its US bankruptcy
- In a sign of further diversification, it will now move into the very buoyant outdoor market having just acquired the Asian rights to UK outdoor brand, Karrimor.
Nikkei Index Options Weekly (Apr 07 – 11): Vol Spikes, Skew Steepens, Macro Shifts Unfold
- Both Nikkei and USD/JPY re-tested levels last seen in early August, with Nikkei implied vols surging.
- Beyond tariffs, we explore what may become the dominant driver of market movements in the weeks ahead.
- Skew steepened materially; we examine how open interest at current spot levels could shape the spot-vol relationship going forward.
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