In today’s briefing:
- [Japan Activism/M&A] Thinking About the Partial Tender Trade Coming in Dec25
- Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell
- HSCEI Index Rebalance: 3 Changes; Yum China In; Double Add for Innovent Bio
- Kioxia (285A JP): Bain’s US$2.1 Billion Selldown
- [Japan Offering] Bain Starting Kioxia (285A) Selldown; More to Come Soonish?
- Kioxia (285A JP) Placement: Limited Passive Buying & Big Runup Opens Up More Downside
- Kioxia Placement – US$2bn Deal, Relatively Small, Index Upweight but the Shares Have Runup
- Iress (IRE AU): Suitors Engaged, But (Still) Nothing Firm
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 3 Changes; US$4bn Trade
- [Japan Offering] Dear Life (3245 JP) – Unusual Offer Dynamics Are Bullish Despite Dilution
[Japan Activism/M&A] Thinking About the Partial Tender Trade Coming in Dec25
- A month ago I wrote [Japan Activism/M&A] – Closing In On the Tsuruha Partial Tender – Likely Needs To Be Higher. Now we are <2wks to the deal.
- At the time, I said the Partial Tender Offer Price needed to be higher than the mooted ¥2,280. Tsuruha Holdings (3391 JP) shares are up 10.0% in that month.
- The three largest peers are -2.0% on average in that period. The average of 8 peers is +0.5%. I still expect the partial offer price needs to be near ¥3,100
Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell
- Kioxia Holdings (285A JP) raised around US$800m (including over-allocation) in its Japan IPO, after pricing its IPO in the middle of its range. Its IPO linked lockup will expire soon.
- Kioxia is a manufacturer and a global leader in flash memory and solid state drives for smartphones, PCs, enterprise servers and data centers.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
HSCEI Index Rebalance: 3 Changes; Yum China In; Double Add for Innovent Bio
- China Hongqiao, Innovent Biologics and Yum China replace ENN Energy, Haidilao International and New Oriental Education in the Hang Seng China Enterprises Index (HSCEI INDEX) in December. All changes are in line.
- Estimated one-way turnover at the rebalance is 4.6% resulting in a round-trip trade of HK$6.3bn (US$811m). The final capping will use the close of trading on 2 December.
- Innovent Biologics is also an add to the Hang Seng Index (HSI INDEX). The passive buying will absorb some stock from the recent placement in China Hongqiao.
Kioxia (285A JP): Bain’s US$2.1 Billion Selldown
- Bloomberg reports that Bain Capital is selling 36.0 million Kioxia Holdings (285A JP) shares through a block trade. IFR reports that the offering is worth up to JPY330 billion (US$2.1 billion).
- The offering is unsurprising given the shares are up around 7x since the IPO. The offering is easily digestible as it represents 2.7 days of the average ADV since listing.
- Kioxia is anticipated to return to growth in 3Q, and the underlying margin is recovering from recent lows. However, Kioxia’s EV/EBITDA multiple is full compared to peers and historical ranges.
[Japan Offering] Bain Starting Kioxia (285A) Selldown; More to Come Soonish?
- After the close today, BCPE Pangea Cayman announced plans to sell a stake of 36mm shares of Kioxia Holdings (285A JP) in an overnight block. It trades tomorrow.
- This is 6.7% of shares out, 1.5x ADV. The discount is 7-9%. But it is 35% of Max Real World Float. And probably gets tradable shares to 34+%, not 35%.
- That means another offering is likely near-term. The lockup is only 30 days it appears. There is possibly a fair bit of long-dated index demand.
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.
Kioxia Placement – US$2bn Deal, Relatively Small, Index Upweight but the Shares Have Runup
- Bain aims to raise around US$2bn via selling around 6% of its stake in Kioxia Holdings (285A JP). The IPO linked lockup on its shareholding had expired in Jun 2025.
- Kioxia is a manufacturer and a global leader in flash memory and solid state drives for smartphones, PCs, enterprise servers and data centers.
- In this note, we will talk about deal dynamics and run the deal through our ECM framework.
Iress (IRE AU): Suitors Engaged, But (Still) Nothing Firm
- The board of Iress Ltd (IRE AU), a trading and wealth management software provider, has denied reports in an Australian article concerning a possible takeover from Blackstone.
- The article said that Blackstone was reportedly back in talks for a bid “that could be worth between $11 and $12 per share“. Iress’ share price promptly popped 8% yesterday.
- Iress is still very much in play as it “continues to engage with multiple parties“.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 3 Changes; US$4bn Trade
- With the review period now complete, there could be 3 constituent changes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
- Constituent changes along with capping changes will lead to a one-way turnover of 12.7% and in a round-trip trade of TWD 125bn (US$4bn).
- There are multiple stocks that have same-way or opposite flow from trackers of other Taiwan indices and present some interesting trading opportunities.
[Japan Offering] Dear Life (3245 JP) – Unusual Offer Dynamics Are Bullish Despite Dilution
- Today after the close, Tokyo-based Dear Life (3245 JP) announced a primary offering to raise approximately ¥7bn through 15% dilution. Implying a 13+% price drop to protect PER.
- But the company plans on growing earnings. It has some projects in inventory, but it obviously plans a lot of turnover this year and needs to replenish.
- The MTMP “slogan” is “2028 – Ride the Wave!” This is a bit what investing in Tokyo real estate is like now. So one rides it until one doesn’t.
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