In today’s briefing:
- Kioxia (285A JP) Placement: Limited Passive Buying & Big Runup Opens Up More Downside
- [Japan Offering] Toyota Selling Down Toyoda Gosei (7282) In BIG Offering; 85d ADV, 125% of Max RWF
- KOSPI Size Indices: Lots of Change as Averaging Starts
- KIOXIA (285A JP) — Q2 FY25 Update, Selldown Context, and Valuation
- [Quiddity Index] Bengo4.com (6027 JP) To TSE Prime and TOPIX Inclusion
- Digital Holdings (2389 JP): SilverCape Revised Terms Faces Twin Challenges
- [Japan Activism] Mandom (4917) Holders Get an Early Win as MBO Bidder CVC Bumps 29%
- [Japan Activism/M&A] SilverCape Renews Its Effort on Digital HD (2389 JP) To Resolve Board Complaint
- Korea FSC Omnibus Rollout Dropped Today: Key Backdrop & Trade-Relevant Angle
- Mandom (4917 JP): A Big Win for Activists as CVC-Sponsored MBO Price Raised to JPY2,520
Kioxia (285A JP) Placement: Limited Passive Buying & Big Runup Opens Up More Downside
- Bain Capital is looking to place 36m shares of Kioxia Holdings (285A JP) to overseas investors at a 7-9% discount to the last close of the stock.
- The stock has run up a lot since its IPO with the last leg driven by inclusion in a global index that took place at the close on Friday.
- Toshiba (6502 JP) had already been selling stock, and the Bain selling could take the stock lower, especially with limited passive buying in the short-term to support the big runup.
[Japan Offering] Toyota Selling Down Toyoda Gosei (7282) In BIG Offering; 85d ADV, 125% of Max RWF
- Last week, before the long weekend, Toyota Motor (7203 JP) and Sumitomo Mitsui Financial Group (8316 JP) announced a very big secondary selldown of shares in Toyoda Gosei (7282 JP).
- The selldown is 85x 3mo ADV, 27% of shares out. 125% of Max Real World Float. It’s a lot of stock at $750mm. One wonders where demand is.
- They also announced a big buyback, which is some of it, and there are index impacts, BUT this offering needs to find LOTS of new fundamental owners quickly.
KOSPI Size Indices: Lots of Change as Averaging Starts
- The review period for the March rebalance of the KOSPI Size Indices will commence on 1 December and will end on 28 February.
- Nearing the start of the averaging period, we forecast 34 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 2 to MidCap and 2 to SmallCap.
- The upward migrations have outperformed the downward migrations by a lot over the last 3 months. The gap in returns versus the KOSPI2 INDEX is a lot smaller.
KIOXIA (285A JP) — Q2 FY25 Update, Selldown Context, and Valuation
- Q2 results confirmed a clear earnings inflection, driven by strong enterprise SSD demand, improving ASPs, and recovering smartphone NAND volumes.
- Q3 guidance signals record revenue and further margin expansion supported by tight NAND supply and AI-linked storage demand.
- Despite near-term pressure from Bain’s selldown, long-term fundamentals remain intact; valuation discounts justify a ¥12,500 target and accumulate-on-weakness stance.
[Quiddity Index] Bengo4.com (6027 JP) To TSE Prime and TOPIX Inclusion
- Back in mid-August, Bengo4.Com Inc (6027 JP) (“Bengoshi.com”) announced that it had applied to transfer to TSE Prime. 3+mos later, today it announced it will move on 4 Dec 2025.
- That sets up a TOPIX inclusion for end-January 2026 and then a likely upweight at end-April 2026.
- There is no accompanying offering, and the float is likely small. But the inclusion displaces the current active base. And there’s at least one large holder selling recently.
Digital Holdings (2389 JP): SilverCape Revised Terms Faces Twin Challenges
- SilverCape has increased its tender offer price for Digital Holdings Inc (2389 JP) by 2.9% to JPY2,450 and raised the minimum tendering condition to 6.8 million shares (36.61% ownership ratio).
- The SilverCape hostile offer faces twin challenges: preventing completion of the Hakuhodo Dy Holdings (2433 JP) offer and gaining the Board’s support/stopping the implementation of countermeasures.
- SilverCape’s revised terms are unlikely to address these challenges. While Hakuhodo may (again) revise its offer, I expect the bump to be marginal (less than 5%).
[Japan Activism] Mandom (4917) Holders Get an Early Win as MBO Bidder CVC Bumps 29%
- Today late in the afternoon session, the Nikkei reported that the MBO price would be bumped by “about 30%”. The stock popped 4.6%.
- Post-Close, the deal is bumped from ¥1,960 to ¥2,520 (+29%). Activist holders Murakami Group with 21.4% and Hibiki Path Advisors with 5.5% have agreed to tender.
- With the two main activists publicly engaged now agreed to tender, this looks like a done deal.
[Japan Activism/M&A] SilverCape Renews Its Effort on Digital HD (2389 JP) To Resolve Board Complaint
- Digital Holdings Inc (2389 JP) jumped today after spending a week or more at levels just above the revised Tender Price of Hakuhodo Dy Holdings (2433 JP).
- SilverCape had promised to bid ¥2,380 against Hakuhodo’s ¥1,970 and the Company responded by threatening a Poison Pill against SilverCape, for relatively spurious reasons (as discussed here).
- Hakuhodo bid slightly more, and lowered its minimum, thereby nearly ensuring their success. HOWEVER…. SilverCape’s CIO interviewed yesterday promised a higher price. The stock popped today. But…
Korea FSC Omnibus Rollout Dropped Today: Key Backdrop & Trade-Relevant Angle
- FSC confirms December rollout; beyond procedural cleanup, this structural shift in flows brings small-to-mid shops and offshore retail, creating new order patterns in the local market.
- Omnibus accounts aggregate orders under one broker, blurring classic smart-money signals, slowing local retail follow-ons, and creating wider price-action gaps in the order book.
- MSCI volatility trades also require attention; the omnibus rollout will likely intensify flows as new accounts follow major institutions, impacting the Korea sleeve short-term.
Mandom (4917 JP): A Big Win for Activists as CVC-Sponsored MBO Price Raised to JPY2,520
- Mandom Corp (4917 JP) has disclosed that the CVC-sponsored MBO price has increased by 28.6% from JPY1,960 to JPY2,520.
- The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its proceeds into the offeror’s parent entity.
- The revised terms are attractive, and this is a done deal. The offer closes on 18 December, with payment from 25 December.
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