IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

Weekly Deals Digest (07 Jun) - Kakaku, Edion/ Yamada, Shinko Shoji, MGM China, Atlas Arteria, Cygnus

Merger Arb Mondays (22 Jun) - Kakaku, Nippon Dry, Shinko Shoji, Accent, Humm, Qoria, Skyworth

Kakaku.com (2371 JP) Tactical Outlook Ahead of Bain/LY Counter-Offer: Pop or Drop?

Kakaku.com (2371 JP): Thoughts on a Potential EQT Privatisation Offer

Kakaku.com (2371 JP): Pass the Popcorn as EQT Launches a Tender Offer

Kakaku.com (2371 JP): How High Can It Go as Bain/LY Ups the Ante?

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>On 4 June, the <a href="https://www.nikkei.com/article/DGXZQOUC04CCA0U6A600C2000000/" target="_blank" rel="noopener">Nikkei reported</a> that <a href="https://www.smartkarma.com/entities/digital-garage-inc" target="_blank" data-smartkarma-citation="entities:13747:1" rel="noopener">Digital Garage (4819 JP)</a> will not accept Bain/<a href="https://www.smartkarma.com/entities/ly-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">LY (4689 JP)</a>'s higher offer for <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com Inc (2371 JP)</a>, as it is not feasible.</li>
<li>Digital Garage’s reasoning is not credible. The most likely reason is that, unlike the EQT offer, Bain/LY are not allowing reinvestment to take a 20% stake in the offeror.</li>
<li>While a setback, Bain/LY can succeed if it secures support from <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> and Oasis. Irrespective of Digital Garage’s stance, EQT will likely need to bump to succeed.</li>
</ul>


On 4 June, the Nikkei reported that Digital Garage (4819 JP) will not accept Bain/LY (4689 JP)'s higher offer for Kakaku.com Inc (2371 JP), as it is not feasible.
Digital Garage’s reasoning is not credible. The most likely reason is that, unlike the EQT offer, Bain/LY are not allowing reinvestment to take a 20% stake in the offeror.
While a setback, Bain/LY can succeed if it secures support from KDDI Corp (9433 JP) and Oasis. Irrespective of Digital Garage’s stance, EQT will likely need to bump to succeed.


Kakaku.com (2371 JP): Digital Garage Moves to Thwart Bain/LY