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

Shocking Shenanigans at the Kansai Super EGM and OK Says Chotto Mattaaaa!!!

OK Store Reiterates Intention to Launch Kansai Super TOB But There Is Invisible Post-Merger Risk

The Kobe District Court Decides To Halt the Kansai Super Merger - Kansai Super Will Appeal

H2O Retailing and OK Super: Which Is the Better Owner of Kansai Supermarket?

Quiddity Advisors

Event-Driven

As discussed in <a href="https://www.smartkarma.com/insights/the-kansai-super-9919-conundrum" target="_blank" data-smartkarma-citation="insights:57564" rel="noopener">The Kansai Super (9919) Conundrum</a> seven weeks ago, the fact that shareholders got excited about a possible OK Corporation alternate bid to the <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> deal with its top shareholder (10.02% of shares out) <a href="https://www.smartkarma.com/entities/h2o-retailing-corp" target="_blank" data-smartkarma-citation="entities:17562:1" rel="noopener">H2 O Retailing (8242 JP)</a> which would merge its Hankyu Oasis unit in return for control, it didn't mean that Kansai Super shareholders would get a good result.I recommended selling Kansai Super.  I had gone into some detail about the shareholder structure to suggest that defeating the EGM proposal for the merger was tougher than it looked.<ul>
<li>The Kansai Super/Hankyu Oasis deal meant Kansai Super gets bigger, gets more revenue, etc, and Hankyu/H2O gets more shares.</li>
<li>There were no explicit terms and/or opportunity for Kansai Super shareholders to sell into an H2O offer so they could not directly compare it to OK Super's proposed ¥2,250/share/share offer which meant that all shareholders could do is look at the market price. </li>
</ul>The shares traded at that price and just 5% below for the next 4+ weeks, then dipped slightly into the EGM date on 29 October. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/140/original/Screenshot+2021-11-02+at+11.25.22+AM.png?1635823538" class="editor-image img-responsive" data-smartkarma-image-id="239140"></figure></section>Retailing expert <a href="https://www.smartkarma.com/profiles/michael-causton" target="_blank" rel="noopener">Michael Causton</a>wrote about the situation in <a href="https://www.smartkarma.com/insights/h2o-retailing-and-ok-super-which-is-the-better-owner-of-kansai-supermarket" target="_blank" rel="noopener">H2O Retailing and OK Super: Which Is the Better Owner of Kansai Supermarket?</a> on 23 October, just a week before the EGM, noting that OK Super offered a better platform for growth. OK Super had come out with an interview touting its proposal on the 20th. OPK Super sounded much more friendly than it initially had. Kansai Super for its part came out with another FAQ on the situation. It did not colour the interactions the same way. On Friday, Kansai Super <a href="http://www.kansaisuper.co.jp/upimages/irinfo/irnews_651.pdf" target="_blank" rel="noopener">announced</a> (Japanese only) that the EGM had passed the Share Exchange proposal and all related proposals related to later absorption mergers and changes of director. The shares dropped 32% in two days to today's ¥1,258/share. Now what?

As discussed in The Kansai Super (9919) Conundrum seven weeks ago, the fact that shareholders got excited about a possible OK Corporation alternate bid to the Kansai Super Market (9919 JP) deal with its top shareholder (10.02% of shares out) H2 O Retailing (8242 JP) which would merge its Hankyu Oasis unit in return for control, it didn't mean that Kansai Super shareholders would get a good result.I recommended selling Kansai Super.  I had gone into some detail about the shareholder structure to suggest that defeating the EGM proposal for the merger was tougher than it looked.
The Kansai Super/Hankyu Oasis deal meant Kansai Super gets bigger, gets more revenue, etc, and Hankyu/H2O gets more shares.
There were no explicit terms and/or opportunity for Kansai Super shareholders to sell into an H2O offer so they could not directly compare it to OK Super's proposed ¥2,250/share/share offer which meant that all shareholders could do is look at the market price. 
The shares traded at that price and just 5% below for the next 4+ weeks, then dipped slightly into the EGM date on 29 October. Retailing expert Michael Caustonwrote about the situation in H2O Retailing and OK Super: Which Is the Better Owner of Kansai Supermarket? on 23 October, just a week before the EGM, noting that OK Super offered a better platform for growth. OK Super had come out with an interview touting its proposal on the 20th. OPK Super sounded much more friendly than it initially had. Kansai Super for its part came out with another FAQ on the situation. It did not colour the interactions the same way. On Friday, Kansai Super announced (Japanese only) that the EGM had passed the Share Exchange proposal and all related proposals related to later absorption mergers and changes of director. The shares dropped 32% in two days to today's ¥1,258/share. Now what?

Kansai Super (9919) Still Not Super as Shareholders Agree H2O Deal