In today’s briefing:
- [Japan M&A] Yamada HD (9831) And EDION (2730) Merger Talks See A Potentially Big Twist
- Ricoh (7752): Activists Were Early, the Consensus Is Late
- Asia-Pac Weekly Wrap: Kakaku.com, OFX, Get Nice, Z Fin, Gabia Inc, China Shengmu, Ajinomoto
- While Companies Buy Time Before Executing Fundamental Measures, Shareholder Proposals Keep Rising
[Japan M&A] Yamada HD (9831) And EDION (2730) Merger Talks See A Potentially Big Twist
- In early June, a Nikkei article suggested that Yamada Holdings (9831 JP) and Edion Corp (2730 JP) would enter talks to merge. The knee-jerk reaction? Send smaller EDION higher.
- That was the wrong trade. Yamada was cheaper on earnings/PSR/PBR with plans to sell assets/restructure. The Yamada/EDION ratio bounced, but is flat over the past month.
- Now we have a new fly in the ointment, and that should be good for Yamada shareholders. It’s a Potentially Big Twist
Ricoh (7752): Activists Were Early, the Consensus Is Late
- The market is pricing Ricoh as a terminal print asset, but the company has demonstrated an ability to harvest this asset and grow its cash flows.
- Bears confuse managed IT’s commodity perimeter with Ricoh’s real core. Japanese enterprise document workflows are contractually and culturally sticky, resisting platform automation.
- Activist Investors own shares of Ricoh equal to 57 days ADV, and they’ve increased their position as the stock under-performed. They were too early, but the consensus is late.
Asia-Pac Weekly Wrap: Kakaku.com, OFX, Get Nice, Z Fin, Gabia Inc, China Shengmu, Ajinomoto
- I tally 30 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below
- Four new deal were discussed on Smartkarma this week: OFX Group (OFX AU), Get Nice (64 HK), Z Fin (1168 HK), and Gabia Inc (079940 KS).
- Key updates/news also took place on: Kakaku.com Inc (2371 JP), China Shengmu Organic Milk (1432 HK), Ajinomoto Co (2802 JP), and Changhong Jiahua (3991 HK).
While Companies Buy Time Before Executing Fundamental Measures, Shareholder Proposals Keep Rising
- An increase in the approval rate for shareholder proposals and a decrease in the approval rate for management proposals will influence the company’s subsequent policies.
- Thanks to TSE’s educational initiatives, there’s been an increase in shareholder proposals that address management issues raised by activist investors. This is expected to encourage companies to implement fundamental reforms.
- However, with most shareholder proposals being rejected, there may be companies that are buying time by increasing shareholder returns until they can implement radical measures that carry significant risk.
💡 Before it’s here, it’s on Smartkarma
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