In today’s briefing:
- Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- [Japan M&A/Activism] The Nagging Little Detail In the Soft99 MBO Extension Target Doc
- Shift (3697 JP) – Short-Selling into Nikkei 225 Inclusion = Crowded Register Dynamic = Squeezy
- [Japan Event] Sony Financial Spin-Off Trades Monday – Fina(Ncia)L Thoughts
- [Japan M&A/Activism] Soft99 Board Comes Out Against Effissimo Bid 66% Above MBO Price
- Sony Spin-off (Sony Financial Group) Spin-off Deep Dive
- Soft99 Corp (4464 JP): The Board Opposes Effissimo’s Hostile Offer and Hints the MBO Will Succeed
- A Pair Trade Between Hyundai Elevator and Hyundai Movex Amid a 7% Stake Sale in Hyundai Movex
- Zijin Mining: US$100bn Breakout on Copper Surge, Valuation Still Offers Upside
- HEW: Resilience Reminders Roil Doves
Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- The ex-date for Sony Financial Group (8729 JP)‘s spinoff from Sony Corp (6758 JP) is 29 September. There will be passive flows at the close on the day.
- There will be no selling from the TOPIX Index and Fglobal trackers. There will be selling from Nikkei 225 (NKY INDEX) trackers and potentially from Mglobal trackers.
- Sony Financial Group (8729 JP) has announced a buyback of up to 1bn shares (13.99% of shares out) over the next year and that will support the stock.
[Japan M&A/Activism] The Nagging Little Detail In the Soft99 MBO Extension Target Doc
- Yesterday, Soft99 Corp (4464 JP) announced a slight change in its “Target Opinion Document” after the MBO Bidco extended its TOB by 8 days the day before.
- The detail was not in the MBO Bidco extension. It was just revealed in an added note on p3 of the Target Opinion.
- That details matters A LOT to people looking at the Effissimo Overbid. The company’s Board has some serious work ahead.
Shift (3697 JP) – Short-Selling into Nikkei 225 Inclusion = Crowded Register Dynamic = Squeezy
- Shift Inc (3697 JP) runs a software quality assurance testing business. 400% revenue growth in 5 years, but this year to Aug25 is “only” 17.5% according to Q3 results guidance.
- It was a “growth stock” for a long while, and large long-only growth investors flocked to the name. In the past several months many have exited.
- The stock will be included in the Nikkei 225 Average next Tuesday. The supply/demand dynamics here to there are interesting. Afterwards they may be more interesting.
[Japan Event] Sony Financial Spin-Off Trades Monday – Fina(Ncia)L Thoughts
- Today is the last day of trading for Sony Corp (6758 JP) with Sony Financial Group (8729 JP) spin-off rights. SFGI starts trading separately on Monday 29 Sep.
- The reference price is ¥150/share. It will likely stay in all major indices except Nikkei 225, and it likely needs low ¥160s to stay in M _ _ _.
- The estimated Div Yield is higher on SFGI than peers by a fair ways, and looks to grow, and there is a big buyback to come. I like it.
[Japan M&A/Activism] Soft99 Board Comes Out Against Effissimo Bid 66% Above MBO Price
- Today after the close, the Soft99 Corp (4464 JP) Board of Directors came out AGAINST the Effissimo ¥4,100/share counterbid to the original ¥2,465/share MBO.
- “The Special Committee advised that the Tender Offer would not contribute to the enhancement of the Company Group’s corporate value, nor would it be fair to the Company’s general shareholders.”
- ¥2,465 is fair. ¥4,100 is not fair. Absolute hogwash. Unmitigated blatherskite. Pure trumpery. Codswallop, buncombe, taradiddle, balderdash, and nincompoopery too. I expound below.
Sony Spin-off (Sony Financial Group) Spin-off Deep Dive
- Sony Group Corporation (6758) is planning to spin off 80% of its stake in Sony Financial Group Inc. (8729) on September 29, 2025.
- Sony Financial Group Inc. is the financial services arm of Sony, comprised of three main businesses
- The spin-off will generate ~ ¥100BN in the current fiscal year and pay a ¥50BN annual dividend.
Soft99 Corp (4464 JP): The Board Opposes Effissimo’s Hostile Offer and Hints the MBO Will Succeed
- The Soft99 Corp (4464 JP) Board has, unsurprisingly, opposed the Effissimo offer for several reasons. Notably, they do address the huge price disparity between the two offers.
- While most of the reasons to justify the opposition are weak, the Board unexpectedly notes that as of 24 September, the MBO retained acceptances to satisfy its minimum tendering condition.
- Despite the significant premium of the Effissimo offer, this development suggests that the current acceptances for the MBO are sticky, thereby increasing the likelihood that Effissimo’s offer will fail.
A Pair Trade Between Hyundai Elevator and Hyundai Movex Amid a 7% Stake Sale in Hyundai Movex
- On 24 September, Hyundai Elevator Co (017800 KS) announced that it plans to sell 7.8 million shares of Hyundai Movex (319400 KS), representing 7% of its outstanding shares.
- Over the next several weeks, we expect continued outperformance of Hyundai Elevator vs Hyundai Movex.
- We like the pair trade of going long Hyundai Elevator and going short Hyundai Movex over the next 1-3 months, especially due to concerns about a 7% sale in Movex.
Zijin Mining: US$100bn Breakout on Copper Surge, Valuation Still Offers Upside
- Copper & Gold Torque: Zijin has crossed US$100bn market cap as copper tops US$10,300/t and gold nears US$3,770/oz, with shares up ~60% in 3M and ~83% in 12M.
- Spin-Off Catalyst: Zijin Gold International IPO raised US$3.2bn at HK$71.6/sh; on our quality-weighted view, fair value is ~US$38.5bn EV vs ~US$24bn at IPO.
- Valuation Upside: 2027E SOTP points to HK$34.8/sh base (+12%), HK$38–39/sh spot (+25%), and HK$39–41/sh bull (+30%); detailed Zijin Gold valuation in our companion report.
HEW: Resilience Reminders Roil Doves
- Bullish GDP revisions and jobless claims provided further reminders that the economy is much more resilient than market pricing has dovishly assumed, causing a hawkish shift.
- Nonetheless, the Riksbank surprised with a 25bp rate cut, but projected that as the terminal rate before hikes start reversing the stimulative setting in 2026.
- Next week’s US payrolls data dominates the calendar, given the potential to break market conviction in an October Fed cut. EA inflation should rise back above the target.
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