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

McD's Japan:  Earnings? Check. Parent Selldown OK? Check. Japanese CEO? Check TSE Prime? Unknown

McDs Japan (2702) Update: Parent Selldown 80% Done, or 63.6% Done.

Equity Bottom-Up

The story of the ownership unwinding of McDonald's Japan&nbsp;has been a very long time coming.&nbsp;McDonald's Japan was started in 1971 by Japanese entrepreneur Den Fujita (who was the&nbsp;idol of Softbank head Matsuyoshi Son&nbsp;when he was young, because of Fujita's vision of bringing something new to Japan on a grand scale). He had a particular vision for McDonald's Japan which was both clear and largely antithetical to the US headquarters' vision for the business. And it continued that way, for decades. But it worked.&nbsp;Fujita started with his first and second stores in July 1971, got to 100 by 1976, 500 by 1985, 1000 stores by 1993, 3000 stores by 1999. Den Fujita retired in April 2003 at the age of 77, and a year later passed away, by which time,&nbsp;McDonald's Japan had grown to 3774 stores, a market share of&nbsp;60+% of the Japan hamburger market, with countless product developments which were copied (in style) by markets elsewhere around the world, and the whole fast food indeed high-turnover retail industry in Japan. Den Fujita had written a half dozen business books, and his business aphorisms were oft-quoted. And he was rich.He was an astute businessman and understood both control and taxation, and he had something of a reputation for it. When he passed away the following year, there was a hue and cry in the Japanese media for his family to pay inheritance taxes (which are quite steep in Japan once you get past a level of several million dollars, though there are deductions). The family was obliged to sell the family's stake to pay the taxes, and in July 2005, sold a 24.98% block in the company to&nbsp;Longreach Capital - a&nbsp;fund run by former&nbsp;UBS Securities head Mark Chiba (more on that below).&nbsp;From that point onward, the question of the eventual disposition of the North American parent's ownership was in question.&nbsp;Today, 10 plus years later, we finally got <a href="http://www.bloomberg.com/news/articles/2015-12-22/mcdonald-s-japan-plunges-after-report-u-s-parent-may-sell-stake" target="_blank">news</a>&nbsp;(BBG) that the McDonald's parent company, which owns 49.9%, is looking to sell down 15-33% of the company&nbsp;with first bids to determine priority negotiating rights expected January.&nbsp;Shares fell 7+% today (Nikkei Asia Review <a href="http://asia.nikkei.com/Business/Deals/McDonald-s-eyes-sale-of-partial-stake-in-troubled-Japanese-arm" target="_blank">article</a>).We finally have a restructuring event&nbsp;but don't buy this dip yet.More below the fold...&nbsp;

The story of the ownership unwinding of McDonald's Japan&nbsp;has been a very long time coming.&nbsp;McDonald's Japan was started in 1971 by Japanese entrepreneur Den Fujita (who was the&nbsp;idol of Softbank head Matsuyoshi Son&nbsp;when he was young, because of Fujita's vision of bringing something new to Japan on a grand scale). He had a particular vision for McDonald's Japan which was both clear and largely antithetical to the US headquarters' vision for the business. And it continued that way, for decades. But it worked.&nbsp;Fujita started with his first and second stores in July 1971, got to 100 by 1976, 500 by 1985, 1000 stores by 1993, 3000 stores by 1999. Den Fujita retired in April 2003 at the age of 77, and a year later passed away, by which time,&nbsp;McDonald's Japan had grown to 3774 stores, a market share of&nbsp;60+% of the Japan hamburger market, with countless product developments which were copied (in style) by markets elsewhere around the world, and the whole fast food indeed high-turnover retail industry in Japan. Den Fujita had written a half dozen business books, and his business aphorisms were oft-quoted. And he was rich.He was an astute businessman and understood both control and taxation, and he had something of a reputation for it. When he passed away the following year, there was a hue and cry in the Japanese media for his family to pay inheritance taxes (which are quite steep in Japan once you get past a level of several million dollars, though there are deductions). The family was obliged to sell the family's stake to pay the taxes, and in July 2005, sold a 24.98% block in the company to&nbsp;Longreach Capital - a&nbsp;fund run by former&nbsp;UBS Securities head Mark Chiba (more on that below).&nbsp;From that point onward, the question of the eventual disposition of the North American parent's ownership was in question.&nbsp;Today, 10 plus years later, we finally got news&nbsp;(BBG) that the McDonald's parent company, which owns 49.9%, is looking to sell down 15-33% of the company&nbsp;with first bids to determine priority negotiating rights expected January.&nbsp;Shares fell 7+% today (Nikkei Asia Review article).We finally have a restructuring event&nbsp;but don't buy this dip yet.More below the fold...&nbsp;

McDonald's Japan: Restructuring Event Coming But Don't Buy This Dip

Mcdonald's Japan

McDonald's Japan: Restructuring Event Coming But Don't Buy This Dip