Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

SBI and Shinsei Responses to the DICJ and an Activist Joins the Party

Shinsei TOB & Poison Pill - Murakami-San's Presence Makes Things Complicated, But in a FUN 🦄 Way

Shinsei EGM:  Govt May Vote AGAINST But Could Shinsei Rig The Vote?

Shinsei Looks To A Poison Pill, But Probably Not Really

Aggressive Commentary by SBI About Shinsei at Earnings

Shinsei TOB: A Complicated Game of 🐓 Nobody Has Thought About?

Gravity Works As WeWork Doesn't; Now Plan B

Quiddity Advisors

Event-Driven

There is an interesting <a href="https://www.zaikai.jp/articles/detail/1046" target="_blank" rel="noopener">article</a> out in Zaikai Online (財界オンライン zaikai.jp) today which talks about the possibility of how the FSA might vote in the <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> EGM which comes in just under three weeks.
The two government entities which own the stock are the Resolution &amp; Collection Corporation (RCC) which owns 26.912mm shares, and the Deposit Insurance Corporation of Japan (DICJ), which owns 20.00mm shares. Together their 46.912mm shares are worth about 22.31% of voting rights, which is a bit more than the total owned by <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> which is opposing the poison pill to be voted on at the EGM. 
The FSA will be the decision-maker on the vote as the DICJ is an FSA entity and the RCC is a subsidiary of a subsidiary of the DICJ. 
I discussed the possible outcomes for tendering by the government entities in <a href="https://www.smartkarma.com/insights/sbi-8473-launches-a-hostile-tender-offer-on-shinsei-bank-8303" target="_blank" data-smartkarma-citation="insights:57426" rel="noopener">SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)!</a> and I discussed the possibilities of how they might vote for a poison pill in <a href="https://www.smartkarma.com/insights/shinsei-looks-to-a-poison-pill-but-probably-not-really" target="_blank" data-smartkarma-citation="insights:57630" rel="noopener">Shinsei Looks To A Poison Pill, But Probably Not Really</a>. 
The tone of the article linked above is interesting. I think worth taking another look. 
Late today, Japanese news agency Jiji reported that US-based international proxy advisor Glass Lewis came out in support of the Poison Pill at the Shinsei EGM. This surprised the market and shares - which had been trading in the ¥1,860-1,870/share range after last week's large TOPIX and JPX Nikkei 400 index down-weight fell sharply - ending the day down more than 3% - a big move for a risk arb situation.
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While the Glass Lewis and ISS voting guidelines suggest that they generally vote against Poison Pills, there are conditions under which they could support. They don't say they will endorse a poison pill if managements do meet those hurdles, just that they could not support if they don't. Shinsei's poison pill plan met all those hurdles as it proposed in its 21 October 2021 <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/211021_announcement1_e.pdf" target="_blank" rel="noopener">document</a> (p27-28) where it came out against the SBI Tender Offer, officially. 
I had not expected Glass Lewis or ISS to endorse the Poison Pill but it was not a slam dunk they would knock it back. IF the proxy advisors knocked it back, it was a high probability event that the Poison Pill would get voted down.
The result of the EGM might be less assured now that Glass Lewis has supported. But it is complicated. The result of the EGM could have effects on future buybacks, future index events, and profitability, and the way the shares move prior to the EGM could affect how people vote at the EGM. The shares at ¥1650 might trigger a different decision than the shares at ¥1,900.
Much more discussion below the fold. 

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There is an interesting article out in Zaikai Online (財界オンライン zaikai.jp) today which talks about the possibility of how the FSA might vote in the Shinsei Bank (8303 JP) EGM which comes in just under three weeks.
The two government entities which own the stock are the Resolution &amp; Collection Corporation (RCC) which owns 26.912mm shares, and the Deposit Insurance Corporation of Japan (DICJ), which owns 20.00mm shares. Together their 46.912mm shares are worth about 22.31% of voting rights, which is a bit more than the total owned by SBI Holdings (8473 JP) which is opposing the poison pill to be voted on at the EGM. 
The FSA will be the decision-maker on the vote as the DICJ is an FSA entity and the RCC is a subsidiary of a subsidiary of the DICJ. 
I discussed the possible outcomes for tendering by the government entities in SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)! and I discussed the possibilities of how they might vote for a poison pill in Shinsei Looks To A Poison Pill, But Probably Not Really. 
The tone of the article linked above is interesting. I think worth taking another look. 
Late today, Japanese news agency Jiji reported that US-based international proxy advisor Glass Lewis came out in support of the Poison Pill at the Shinsei EGM. This surprised the market and shares - which had been trading in the ¥1,860-1,870/share range after last week's large TOPIX and JPX Nikkei 400 index down-weight fell sharply - ending the day down more than 3% - a big move for a risk arb situation.


While the Glass Lewis and ISS voting guidelines suggest that they generally vote against Poison Pills, there are conditions under which they could support. They don't say they will endorse a poison pill if managements do meet those hurdles, just that they could not support if they don't. Shinsei's poison pill plan met all those hurdles as it proposed in its 21 October 2021 document (p27-28) where it came out against the SBI Tender Offer, officially. 
I had not expected Glass Lewis or ISS to endorse the Poison Pill but it was not a slam dunk they would knock it back. IF the proxy advisors knocked it back, it was a high probability event that the Poison Pill would get voted down.
The result of the EGM might be less assured now that Glass Lewis has supported. But it is complicated. The result of the EGM could have effects on future buybacks, future index events, and profitability, and the way the shares move prior to the EGM could affect how people vote at the EGM. The shares at ¥1650 might trigger a different decision than the shares at ¥1,900.
Much more discussion below the fold. 



Further Shinsei Complications: Glass Lewis Endorses the Poison Pill. Will the FSA Vote?

SBI Shinsei Bank

Further Shinsei Complications: Glass Lewis Endorses the Poison Pill. Will the FSA Vote?