In today’s briefing:
- Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings
- NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
- Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
- CATL (300750 CH): Index Inclusion as Potential Listing Nears
- [Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities
- [Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
- [Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame
- Laopu Gold (6181 HK): Heritage Luxury, Guochao Appeal. Key Facts, Financials & Valuation
- NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000
- East Buy Holdings (1797 HK): Potential KWEB Deletion in June
Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings
- Nidec Corp (6594 JP) bid ¥11,000 for Makino Milling Machine Co (6135 JP) in December, saying it expected to launch on 4-April. It launched its ¥11,000 bid on 4-April.
- A Nikkei article in March suggested Makino had found multiple competing bidders, some who had put in “legally binding bids.” No news on those yet, but we have a month.
- Earnings are 9-May. Strategy on timing for Makino differs according to its desired outcome. It has to opine on Nidec’s bid by about 18 April. Be long. Carry 🍿🍿🍿 .
NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
- This morning, the Nikkei says NTT (Nippon Telegraph & Telephone) (9432 JP) has decided, 5 years after taking Docomo private, to buy out minorities in NTT Data Corp (9613 JP).
- NTT owns 58%. The article suggests a “30-40% premium” (¥3,900-4,200) “is likely”, with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.
- It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There’s a cool index event too.
Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
- Full circulation implementation at the beginning of April derailed Laopu Gold (6181 HK)‘s chances of global index inclusion in May.
- The company has now launched a US$300m primary placement that will significantly improve chances of inclusion in the same global index in August.
- Laopu Gold (6181 HK) will also be added to another global index in September, so there are a few index inclusions likely for the stock this year.
CATL (300750 CH): Index Inclusion as Potential Listing Nears
- Reports continue to indicate a US$5bn raise for CATL H-shares with a discount of up to 10% to CATL (300750 CH) and with cornerstone investors taking up half the deal.
- The company is currently gauging investor demand. The IPO could open next week and the H-shares could list later this month.
- Index Fast Entry largely depends on the cornerstone investor allocation. Float higher than 50%/60% is required for Fast Entry to global indices.
[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities
- Pre-Open, we got a Nikkei article which suggested four different prices possible. We got something in the middle. I think NTT is probably overpaying here.
- There is a fair bit of transparency in the documents and valuation. That is encouraging. There are no synergies counted in the fair calculations. That is discouraging.
- This will not trade like a “normal” Japan risk arb situation. There will be nuances.
[Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
- Mitsubishi Shokuhin (7451 JP) was supposed to announce earnings at 2pm JST. They didn’t. Someone (or people) decided that meant there might be a takeover. There was.
- The stock popped nearly 15% to ¥6,200, paused, was flat for an hour, then popped again, closing at ¥6,150/share. Post-close, we get a deal at ¥6,340/share.
- A disappointing process. At ¥6,240, the Special Committee said it was “far from a standard that takes into account the interests of TargetCo’s minority shareholders.” At ¥6,340, they dealt. Aaaargh.
[Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame
- Yageo Corporation (2327 TT) has now strongly overbid Minebea’s weak overbid of Yageo’s strong overbid of Minebea’s weak overbid of Yageo’s initial hostile offer for Shibaura Electronics (6957 JP).
- We are now 40% higher than the initial bid and the best bid is approaching the top end of Valuation Agent’s top-of-DCF-range prices. There may be a bit more. Maybe.
- The question now is only whether Minebea responds. If it does, there is a little juice left, but if not, that’s it. It should get done.
Laopu Gold (6181 HK): Heritage Luxury, Guochao Appeal. Key Facts, Financials & Valuation
- Laopu Gold (6181 HK) targets to raise approximately USD350 mn from a primary placement of 4.31 million new shares at HKD630 per share.
- Laopu Gold has delivered both superior margins and rapid growth by marrying cultural resonance, premium pricing, artisanal excellence, and outstanding store economics.
- Laopu’s growth track record coincides with period of rising gold prices. Investors should weigh its impressive margins and brand strength against the risk of a less supportive gold price environment.
NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000
- NTT Data Corp (9613 JP) has recommended a tender offer from NTT (Nippon Telegraph & Telephone) (9432 JP) at JPY4,000 per share, a 33.7% premium to the last close.
- The Nikkei earlier reported on the offer. The offer represents an all-time high and is attractive compared to historical trading ranges, peer multiples and precedent transactions.
- The offer could be considered light as it is below the midpoint of the target IFA’s DCF valuation range. However, the shareholder structure suggests a done deal.
East Buy Holdings (1797 HK): Potential KWEB Deletion in June
- East Buy Holding (1797 HK) was deleted from the Hang Seng TECH Index in March and could be deleted from the KraneShares CSI China Internet ETF (KWEB US) in June.
- There are other ETFs that track the same index (and similar indices), and those trackers will be selling East Buy Holding (1797 HK) too.
- There has been some short covering in the stock recently, but short interest is pretty high as a percentage of float. Watch out for short covering that offsets passive selling.
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