In today’s briefing:
- With Us (9696 JP): NSSK’s JPY3,237 Tender Offer
- [Japan ECM/Index] Azoom (3496) Offering to Enable Move to TOPIX
- Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business
- Bank of Japan’s June Policy Decision: A Non-Event for Markets?
- Restar (3156 JP) – Progress Required to Unlock Full Potential
- Declining Number of Shares Has Just Begun, but Valuations Need to Rise for Market Cap to Grow
- Primo Global Pre-IPO: Fairly Valued, Controlling Shareholders Rushing for Exit
With Us (9696 JP): NSSK’s JPY3,237 Tender Offer
- With Us Corp (9696 JP) has recommended a tender offer from Nippon Sangyo Suishin Kiko (NSSK) at JPY3,237, an 18.0% premium to the last close price.
- The offer represents an all-time high and concludes SwissAsia’s activist campaign to spill the Board at the AGM on 26 June.
- SwissAsia and the founding family have provided irrevocables (39.81% ownership ratio), paving the way for deal completion.
[Japan ECM/Index] Azoom (3496) Offering to Enable Move to TOPIX
- On Friday 6 June, Azoom (3496 JP) announced it would conduct an offering (small issuance of new shares, some Treasury shares, larger selldown by the main shareholder).
- That comes in conjunction with a transfer to TSE Prime from TSE Growth, which itself leads to a TOPIX Inclusion trade next month.
- The company has decided to tack on a special dividend for this year, on top of growth and more liquidity. None of this is especially bad.
Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business
- For each share of Sony Corp (6758 JP), shareholders will receive 1 share of Sony Financial Group. Ex-date for the dividend in-kind is 29 September.
- The Nikkei has started a market consultation on treatment of the spinoff in the Nikkei225 and that means the dividend in-kind will not be included in the Dividend Point Index.
- There will be some selling in SFGI from passive trackers and the company will buy back some stock following listing. Details of the buyback have not been announced yet.
Bank of Japan’s June Policy Decision: A Non-Event for Markets?
- With Japan’s policy rate at 0.5% and the last hike in January 2025, markets are closely watching the BoJ’s next move on June 17.
- Historical data shows limited market impact from anticipated rate decisions—but rare surprises, like the July 2025 hike, have triggered outsized index reactions.
- While historical data and current option pricing suggest the June BoJ decision is unlikely to move markets significantly, investors should be aware of low-probability tail risk when positioning.
Restar (3156 JP) – Progress Required to Unlock Full Potential
- Business scaling and transforming – Q1-4 FY3/25 results were in line with our expectations, with a relatively resilient underlying earnings trend YoY despite FX headwinds and difficult macro conditions.
- Restar’s roll-up strategy contributed to a 9.5% YoY sales growth. Profitability declined due to a deteriorating sales mix in the Device business and intensifying competition in the power supply-demand adjustment market in Eco solutions.
- Progress is evident for business transformation efforts to introduce high-value-added services, with the consolidated PCI Group rebranded as the IT & SIer BU (business unit). F
Declining Number of Shares Has Just Begun, but Valuations Need to Rise for Market Cap to Grow
- That’s good news when considering that the number of listed shares is declining, which means that the understanding of the cost of capital has spread to some extent among companies.
- With many companies having excess cash on hand and being able to generate cash from restructuring their business portfolios, the number of listed shares is expected to continue to decline.
- Since there are only a few companies that global investors can invest in, there is a need to strengthen profitability to increase corporate value to increase market capitalization per company.
Primo Global Pre-IPO: Fairly Valued, Controlling Shareholders Rushing for Exit
- Primo Global (367A JP) is looking to raise up to $96m in its upcoming Japan IPO
- It specializes in merchandising bridal jewellery, namely engagement rings and wedding rings.
- In this note, we examine the IPO dynamics, and look at the firm’s valuation.
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