Round two for WUS
On 10 June we wrote our first open letter to WUS Printed Circuit, a Taiwan-listed PCB manufacturer with a stake in a Shenzhen-listed company worth around four times its market cap. The company had been ignoring our requests for engagement, so we were forced to go public with suggestions on how to improve the company’s governance and reduce the shares’ 80% discount to net asset value. ... more
Value-up index announced
Korea Exchange released the details of its long-awaited Korea Value-up index.
As expected, not one non-financial holding company was included in the index, although many listed subsidiaries were. This was not a surprise to us, as we have not seen wholehearted participation in Corporate Value-up (CVU) by any of the nonfinancial holding companies with the exception of LG Corp. We expect this to change over time following pressure by investors, regulators and the stock exchange. ... more
Gentle persuasion
Korea continues to be a key focus. Foreign investors are still generally quite sceptical on the prospects for the Value-up programme, with fewer than 30% expecting it to have a meaningful impact Principal reasons are the perceived inability of the government to pass legislation due to its minority position combined with the structural impediment of an equity market dominated by majority shareholders that seemingly don’t care about share prices. ... more
Corporate Value-up
The Financial Services Commission (FSC) in Korea recently released the “Corporate Value-up Program”. Some highlights: ... more
Naming and shaming
November brought seven management buyout (MBO) announcements in Japan – the most in twelve years (figure 1). We last wrote about Japanese tender offers (including MBOs) in our January newsletter (Vigilance is Required, 3 February 2023). At the time, we identified two medium-term catalysts behind the trend:
... moreA regulatory development in Japan
Japan’s Financial Services Agency is examining a long-standing loophole in the tender offer rules. Currently, an acquirer can buy any amount of shares in a company on-market without having to tender for the whole company.
A tender offer is only required when a 33% or more stake is bought off-market. This contrasts with jurisdictions such as the UK, where an acquirer must make a full tender offer upon reaching a certain threshold, irrespective of how the shares were acquired. ... more
One in a thousand
Unsolicited and / or hostile tender offers are rare in Asia-Pacific and particularly so in Korea - it ties with China in having the lowest proportion of such transactions (around one in a thousand according to Bloomberg); Australia by contrast has the highest with 12.8% (figure below). ... more
Vigilance is required
The start of the year has already brought five $100 million-plus Japanese takeovers, representing a decade-plus high for the month of January. It contrasts with a 36% year-on-year slowdown in global M&A. What is behind the uptick? ... more
Congratulations to the new chairman of NBI
Metrica Partners notes the resignation of the chairman of NBI, announced today, and welcomes his successor: https://nbi-shareholders.com/2020/09/22/congratulations-to-the-new-chairman/ ... more
Second letter to NBI Industrial Finance
Metrica today sent a second letter to the chairman of NBI: https://nbi-shareholders.com/2020/09/21/second-letter-to-nbi-board/ ... more