In today’s briefing:
- Taiwan’s Yageo (2327 TT) Announces Hostile Tender on Shibaura Electronics (6957 JP) – I Have 🍿🍿
- Barito Renewables Energy (BREN IJ): Global Index Inclusion Likely This Month
- Korea: 11 Potential Index Deletions in February
- Shibaura Electronics (6957 JP): Yageo’s (2327 TT) Hostile Preconditional Tender Offer at JPY4,300
- TOC (8841) Buyback Makes One Wonder When The Takeout Comes
- Fuji Soft (9749) – KKR Bumps Bigly In Bain Boyg; Buyers Bully a Bagarre
- STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍
- Tohto Suisan (8038 JP) – Aso Corp To Launch Tender Offer at ¥7,500/Share
- Japan CorpGovReports: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Feb25), TSE Updates
- Must Asset Mgmt Goes Activist on Young Poong
Taiwan’s Yageo (2327 TT) Announces Hostile Tender on Shibaura Electronics (6957 JP) – I Have 🍿🍿
- Today, Taiwanese passive components maker Yageo Corporation (2327 TT) announced its Board had approved the launching of a Tender on Shibaura Electronics (6957 JP).
- It turns out YAGEO approached them in October, Shibaura stonewalled for 3mos, required an NDA to meet, and refused to budge. METI Corporate Takeover Guidelines were likely ignored.
- This could set off a flurry of activity including competition, an auction, promises of dividends, and who knows what. It will be exciting but it’s not C&F.
Barito Renewables Energy (BREN IJ): Global Index Inclusion Likely This Month
- Barito Renewables Energy (BREN IJ) stock has gone through a series of gyrations as index inclusion was announced and then retracted due to the concentrated holding of the stock.
- With pre-IPO PE/VC investors selling some stock, the increase in float could result in the inclusion of Barito Renewables Energy (BREN IJ) in a global index later this month.
- The inclusion of the stock in the index will require passive trackers to buy just over 400m shares of the stock. That is over 14x ADV and will be impactful.
Korea: 11 Potential Index Deletions in February
- There are 11 stocks (maybe 12) in Korea that could be deleted from a global index in February and that will result in large selling from passive trackers.
- With announcement in a week and implementation in just over 3 weeks, there is positioning in a lot of the names.
- With short selling still banned, positioning will not be as high as the passive selling and the stocks could still drop over the next few weeks.
Shibaura Electronics (6957 JP): Yageo’s (2327 TT) Hostile Preconditional Tender Offer at JPY4,300
- Yageo Corporation (2327 TT) announced a hostile preconditional tender offer for Shibaura Electronics (6957 JP) at JPY4,300 per share, a 37.2% premium to the last close.
- The offer is preconditional on regulatory approvals (Japan, Taiwan) and Board recommendation (can be waived). The offer is scheduled to start on 7 May.
- The offer represents an all-time high. The Board has three options: facilitate a friendly offer, find a white knight bidder or launch an ambitious MTM plan to thwart the offer.
TOC (8841) Buyback Makes One Wonder When The Takeout Comes
- 7 years ago I wrote a big piece titled TOC’s BIGLY Buyback Makes It a Takeout Target. I thought the shareholder structure and buyback plans looked like a creeping takeover.
- In December 2017, Effissimo had sold a very large stake back to the company. I wrote in March 2018. 10mos later they did another and I wrote again.
- Since then they’ve bought back a bit more. Today they are buying back another 5%. It still looks like a potential takeover.
Fuji Soft (9749) – KKR Bumps Bigly In Bain Boyg; Buyers Bully a Bagarre
- In Dec 2024, Bain announced it would overbid KKR’s bid without requiring Fuji Soft’s approval, backed by the founding family. In early Jan 2025, we got an anticipated start date.
- That anticipated start date is upon us. KKR’s deal to close 7 Feb is now bumped to ¥9,800 and extended 7 days, suggesting Bain’s bid beacons.
- I think they’ll have to go to ¥10,000 and from here there may not be much upside. I’d rather stay away.
STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍
- With the review period complete, we forecast 3 changes for the SSE STAR50 (STAR50 INDEX) and 8 changes for the STAR100 Index. There are a few migrations between the indices.
- We estimate turnover of 3.8% for the SSE STAR50 (STAR50 INDEX) and 9.9% for the STAR100 Index. The estimated net round-trip trade is CNY 13bn (US$1.8bn).
- The forecast adds to the STAR50 INDEX have underperformed the forecast deletes. For the STAR100 Index outright changes, the forecast adds have outperformed the forecast deletes by a lot.
Tohto Suisan (8038 JP) – Aso Corp To Launch Tender Offer at ¥7,500/Share
- 4+ years ago Aso Corp launched a Tender Offer to buy 33.4% or up to 100% of marine products wholesaler Tohto Suisan (8038 JP). They got just over a third.
- Then it became a zombie as I warned Tohto Suisan Partial Tender Offer – A Weird Tender Which Leads To Listed Zombie-Ism. But it moved around.
- Today, Aso announces a tender to take out minorities, almost all of whom are other corporate holders. It’s at a 39% premium and 1.2x book. It should get done.
Japan CorpGovReports: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Feb25), TSE Updates
- TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
- 171 new CGRs were filed since 31-Dec-2024. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.
- A surprising number of smaller companies have yet to file a MCoCC/SP Awareness report. As cross-holdings get sold down, I expect they will become activists targets in 2025.
Must Asset Mgmt Goes Activist on Young Poong
- Must Asset Management, a 3% shareholder of Young Poong (000670 KS), started to go activist on the company on 5 February.
- Based on current market cap, this would represent a P/B of 0.2x using the consolidated controlling interest equity of 3.9 trillion won!
- There is some speculation that Must Asset Mgmt may form an alliance with Chairman Choi’s family as it proposed to Young Poong to recommend outside directors.
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