In today’s briefing:
- Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive
- (Mostly) Asia-Pac M&A: Abacus Storage, Gold Road, Mayne Pharma, Canvest, ESR, Shibaura Electronics
- TOPIX Inclusions: Who Is Ready (Apr 2025)
- Meitetsu Transport (9077JP) Confirms Closure of Last Department Store
- Hisamitsu Pharmaceutical (4530 JP): Salonpas Holds Fort; New Products Ramp-Up; Stable FY26 Expected
- Effectiveness of MBO Special Committee Is Linked to Effectiveness of Independent Directors
Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive
- Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) announced a merger through a share exchange followed by a partial tender offer by Aeon for a 50.90% stake of the merged entity.
- The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha shareholder vote is high risk as Orbis, the second-largest shareholder, intends to vote NO.
- Aeon Co Ltd (8267 JP)’s follow-up partial offer for Tsuruha is unattractive compared to its previous offer for the Oasis stake, peer multiples and premium to the undisturbed price.
(Mostly) Asia-Pac M&A: Abacus Storage, Gold Road, Mayne Pharma, Canvest, ESR, Shibaura Electronics
- I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- One new deal discussed this week: Public Storage (PSA US)‘s NBIO, by way of a Scheme, for Abacus Storage King (ASK AU).
- Key updates/news took place on Gold Road Resources (GOR AU), Mayne Pharma (MYX AU), Canvest Environmental (1381 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK), Shibaura Electronics (6957 JP).
TOPIX Inclusions: Who Is Ready (Apr 2025)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- The TOPIX Inclusions of Baudroie (4413 JP) and JX Advanced Metals (5016 JP) are expected to take place at the end of April 2025.
- Separately, the 0.75x TOPIX Liquidity Factor removal event will also take place at the same time. We expect one-way flows of US$514mn for this event.
Meitetsu Transport (9077JP) Confirms Closure of Last Department Store
- Until quite recently, Nagoya had seven department stores but will soon have just four.
- This follows Meitetsu’s decision to close its flagship store to clear the way for a major redevelopment of the station area.
- The new development will include retail and so bring some competition to Takashimaya, which now dominates department store retailing in the city, but not before 2033.
Hisamitsu Pharmaceutical (4530 JP): Salonpas Holds Fort; New Products Ramp-Up; Stable FY26 Expected
- Hisamitsu Pharmaceutical Co (4530 JP) reported double digit revenue growth in FY25 on the back of 16% YoY growth in Salonpas focused OTC pharmaceutical products.
- Rx business revenues grew 5% YoY as Zicthoru, Apohide, Combipatch, Vivelle-Dot etc clocked healthy numbers excepting Mohrus product line.
- Hisamitsu expects FY26 revenue to be ¥165B, up 6% YoY, driven by new products, with net profit growth to decelerate on higher cost.
Effectiveness of MBO Special Committee Is Linked to Effectiveness of Independent Directors
- The key is whether the effectiveness of special committee can fairly guide MBO, but whether the independent outside directors are truly independent, properly informed, and skilled is an important assumption.
- Since companies with high foreign shareholdings generally have higher corporate governance practices, there are concerns about practices in MBO cases for many companies that do not have high foreign shareholdings.
- When a company whose “goal is IPO” conducts MBO when the stock price is lower than at IPO, there are concerns about whether the special committee will guide MBO fairly.
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