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

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

Kansai Super (9919): Osaka High Court Overturns District Court Injunction

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

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

Quiddity Advisors

Event-Driven

A week ago in <a href="https://www.smartkarma.com/insights/kansai-super-9919-still-not-super-as-shareholders-agree-h2o-deal" target="_blank" data-smartkarma-citation="insights:59970" rel="noopener">Kansai Super (9919) Still Not Super as Shareholders Agree H2O Deal</a> I wrote that the merger between Kansai Super and two of H2O's unlisted units had passed the EGM on the 29th and the local comments had been that it had been close. That deal had been announced 31 August and is due to go into effect on 1 December. Something of a shotgun marriage.The EGM was going to be contested because the third largest shareholder OK Corp had, 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>, cried "Chotto Mattaaaa!" (the rough equivalent is "Now hold on a second!") and launched a public re-proposal of its proposal from the summer - three months before the announcement of the H2O deal - which would have, in addition to probably making more sense, meant a huge cash payout for shareholders. Kansai Super rejected it in favor of its long-time "parent" company, so we went to EGM without further deliberating the OK Corp deal. We later found out that the Mochikabukai (the Trading Partner Shareholding Association, which owned about 9% as second largest grouping, and is usually a sure ally for any management team) had had disagreements amongst the members, with several corporate shareholders being quite vocal. In the end the vote had been split rather than voted down the line. After the mochikabukai meeting, H2O and Kansai Super put the full court press on corporate and financial crossholder partners to get them to vote FOR.OK Corp petitioned the court to appoint an EGM Inspector General to make sure the EGM was conducted properly and investigate the procedure for calling the EGM, and when the votes were counted, the Chairman of the Kansai Super EGM said that the vote had passed as proposed. But there were no details. Details are often published on EDINET shortly after the meeting. This time they were published on the 4th - a full week later, and they were a shocker. The proposals for the merger needed two-thirds of the vote, and the major one (Item 1) got 66.68%. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/650/original/Screenshot+2021-11-09+at+8.41.26+PM.png?1636461711" class="editor-image img-responsive" data-smartkarma-image-id="240650"></figure></section>That is as tight as I have EVER seen a vote. The vote could not be assured by the time the meeting was held so they had to conduct "marksheet voting" on the spot for those who had attended (including those who had already mailed in a vote ballot). Then they counted and recounted, and just to be sure extended the final announcement. Apparently after 6 hours, the Chairman of the meeting went back into the meeting and said "the measures passed, just barely."With the result in, however close, the OK Corp President - cognisant that the EGM Inspector General had been on hand to oversee proceedings - said "We will accept the result."A day ago it became apparent there were problems with that vote.Serious problems. In fact it is an absolute shocker. It seemed to bother the EGM Inspector General enough that a report which normally takes 40 days to file with the court took only seven.The market took a look at the contents and decided it liked OK Corp's chances. The stock went limit up today.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/694/original/Screenshot+2021-11-09+at+10.38.15+PM.png?1636468773" class="editor-image img-responsive" data-smartkarma-image-id="240694"></figure></section>Today OK Corp said "Chotto Mattaaaa!" again.OK Corp filed a <a href="https://ok-corporation.jp/media/001/202111/%E9%96%A2%E8%A5%BF%E3%82%B9%E3%83%BC%E3%83%91%E6%A7%98%E3%81%AE%E6%A0%AA%E5%BC%8F%E4%BA%A4%E6%8F%9B%E3%81%AE%E5%B7%AE%E6%AD%A2%E3%82%81%E3%81%AE%E4%BB%AE%E5%87%A6%E5%88%86%E3%81%AE%E7%94%B3%E7%AB%8B%E3%81%A6%E3%81%AB%E3%81%A4%E3%81%84%E3%81%A6.pdf" target="_blank" rel="noopener">petition</a> with the Court for a preliminary injunction for the merger scheduled for 1 December based on improper procedure at the EGM.I've got popcorn.

A week ago in Kansai Super (9919) Still Not Super as Shareholders Agree H2O Deal I wrote that the merger between Kansai Super and two of H2O's unlisted units had passed the EGM on the 29th and the local comments had been that it had been close. That deal had been announced 31 August and is due to go into effect on 1 December. Something of a shotgun marriage.The EGM was going to be contested because the third largest shareholder OK Corp had, as discussed in The Kansai Super (9919) Conundrum, cried "Chotto Mattaaaa!" (the rough equivalent is "Now hold on a second!") and launched a public re-proposal of its proposal from the summer - three months before the announcement of the H2O deal - which would have, in addition to probably making more sense, meant a huge cash payout for shareholders. Kansai Super rejected it in favor of its long-time "parent" company, so we went to EGM without further deliberating the OK Corp deal. We later found out that the Mochikabukai (the Trading Partner Shareholding Association, which owned about 9% as second largest grouping, and is usually a sure ally for any management team) had had disagreements amongst the members, with several corporate shareholders being quite vocal. In the end the vote had been split rather than voted down the line. After the mochikabukai meeting, H2O and Kansai Super put the full court press on corporate and financial crossholder partners to get them to vote FOR.OK Corp petitioned the court to appoint an EGM Inspector General to make sure the EGM was conducted properly and investigate the procedure for calling the EGM, and when the votes were counted, the Chairman of the Kansai Super EGM said that the vote had passed as proposed. But there were no details. Details are often published on EDINET shortly after the meeting. This time they were published on the 4th - a full week later, and they were a shocker. The proposals for the merger needed two-thirds of the vote, and the major one (Item 1) got 66.68%. That is as tight as I have EVER seen a vote. The vote could not be assured by the time the meeting was held so they had to conduct "marksheet voting" on the spot for those who had attended (including those who had already mailed in a vote ballot). Then they counted and recounted, and just to be sure extended the final announcement. Apparently after 6 hours, the Chairman of the meeting went back into the meeting and said "the measures passed, just barely."With the result in, however close, the OK Corp President - cognisant that the EGM Inspector General had been on hand to oversee proceedings - said "We will accept the result."A day ago it became apparent there were problems with that vote.Serious problems. In fact it is an absolute shocker. It seemed to bother the EGM Inspector General enough that a report which normally takes 40 days to file with the court took only seven.The market took a look at the contents and decided it liked OK Corp's chances. The stock went limit up today.Today OK Corp said "Chotto Mattaaaa!" again.OK Corp filed a petition with the Court for a preliminary injunction for the merger scheduled for 1 December based on improper procedure at the EGM.I've got popcorn.

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

Kansai Super Market

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