In today’s briefing:
- [Japan M&A] Bloomberg Reports Bain MBO on Nissin (9066) May Come Monday – The Implied Price Is Light
- [Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.
- Goldlion Holdings (533 HK): An Unexpected HK Arbageddon
- HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
- HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)
- Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?
- Imagica (6879 JP): MBO Tender Offer at JPY795
- How NXT (ATS) Affects Event Pricing from a Microstructure Perspective
- India: Potential Free Float Changes & Passive Flows in 3 Weeks
- Ohayo Japan | Great Progress Made???
[Japan M&A] Bloomberg Reports Bain MBO on Nissin (9066) May Come Monday – The Implied Price Is Light
- Last year, Nissin Corp (9066 JP) started race-walking the good governance walk. The day they released earnings they announced crossholding sales and an overnight 23.61% ToSTNeT-3 Buyback (executed successfully).
- They also expected 19% Net Income Growth (to go with accretion), and in November, nearly doubled their dividend on new payout policy (minimum 4% DOE).
- Now, Bloomberg reports they are considering going private via a Bain MBO at ¥100bn+ (or a 30% premium).
[Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.
- This deal should not come as a surprise. Bloomberg has an article out saying tycoons are taking companies private to avoid shareholder activism. It’s not just that.
- The stated reasons (competitive environment requiring faster decision-making and significant restructuring) are all kinda hot garbage. This is being done at adjusted EV/EBITDA of 4x and 10x FCF.
- And there are no synergies counted, and half of the Adjusted EV is net receivables+inventory equal to about 2mos of revenues. This is being done too cheaply. But…. TIJ baby…
Goldlion Holdings (533 HK): An Unexpected HK Arbageddon
- Goldlion Holdings (533 HK) shareholders have voted against Mr Tsang’s HK$1.5232 per share offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
- The Goldlion deal break was unexpected, and the HKEx merger arb rulebook will be rewritten. This deal break offers several lessons.
- Goldlion had the highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$0.953, 36.0% below last close.
HSTECH Index Rebalance Preview: BYD (1211 HK) Could Replace China Literature (772 HK); Huge Trade
- The review period for the June rebalance of the HSTECH INDEX ended on 31 March, the changes will be announced on 16 May and implemented on 6 June.
- Following the launch of the God’s Eye ADAS, BYD (1211 HK) could become eligible for index inclusion after meeting the Autonomous theme and Innovation screening.
- The inclusion of BYD (1211 HK) in the index could result in China Literature (772 HK) being deleted from the index in June.
HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace Sunny Optical (2382 HK)
- The review period for the June rebalance of the HSCEI ended on 31 March, the results will be announced on 16 May and will be implemented on 6 June.
- Pop Mart International Group L (9992 HK) could be added to the index while Sunny Optical Technology Group (2382 HK) could be deleted from the index.
- There are other stocks with big flows due to a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the rebalance in June.
Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?
- Nissin Corp (9066 JP) shares were up 10.3% based on a Bloomberg report that it would be privatised through a Bain-sponsored MBO.
- The deal is expected to exceed JPY100 billion. Assuming this refers to a market cap, the implied offer price is around JPY6,500 (21.5% premium to last close).
- While the rumoured offer represents an all-time high share price, it is light compared to precedent and peer multiples. A long-dated offer makes it susceptible to a counterbid.
Imagica (6879 JP): MBO Tender Offer at JPY795
- Imagica Robot Holdings (6879 JP) has recommended a MBO tender offer from Shunjiro Nagase (President) at JPY795 per share, a 43.0% premium to the undisturbed price.
- The offer is reasonable compared to historical trading ranges and is above the midpoint of the IFA DCF valuation range.
- Irrevocables (55.40% ownership ratio) pave the way for deal completion. The tender runs from 12 May to 20 June (30 business days).
How NXT (ATS) Affects Event Pricing from a Microstructure Perspective
- Next day’s base price uses the 3:30pm close—NXT’s after-hours moves don’t count. That small gap can impact rights offerings, as seen in Samsung SDI’s pricing delta on April 8.
- NXT after-hours volumes count toward VWAP. So in uptrends, they can impact pricing—possibly with Samsung SDI’s final reference price on May 16.
- No shorting allowed after 3:30pm on NXT, leading to inefficiencies—while not yet fit for latency arb, it’s ripe for tactical day–night spread plays and re-entry timing.
India: Potential Free Float Changes & Passive Flows in 3 Weeks
- Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-December and/or end-September.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
- Depending on the date that the shareholding was published, there could be 6 stocks with passive inflows from global trackers while 4 could see passive outflows in May.
Ohayo Japan | Great Progress Made???
- Stocks were generally flat and rangebound as investors awaited key U.S.-China trade talks in Switzerland
- Fuji Oil has cancelled its planned production of recycled aviation fuel (SAF) due to soaring construction costs for production facilities and rising prices of waste cooking oil
- Nissan Motor has scrapped plans for its first electric vehicle battery plant in Japan due to poor financial performance, deeming the significant investment unfeasible
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