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

Shinsei Objects to SBI Tender - Offers "Requirements" To Approve

Shinsei TOB: A Complicated Game of 🐓 Nobody Has Thought About?

Aggressive Commentary by SBI About Shinsei at Earnings

Shinsei To Launch a Poison Pill; SBI Plays Coy, So We Wait

SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)!

Shinsei Looks To A Poison Pill, But Probably Not Really

Quiddity Advisors

Event-Driven

Since <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> launched a Tender Offer to buy 27+% of <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> to take it to a 48% stake nearly three weeks ago, there has been considerable back and forth between the two parties - both directly in press releases and Opinion Statements - and through the press and speculation/opinion/commentary by disinterested third parties.The series of interactions in public in a kind of dual-path 'Call and Response' function is shown below. <table class="table table-striped">
<colgroup>
<col>
<col span="2">
<col>
</colgroup>
<tbody>
<tr><td colspan="4" style="text-align: left; width: 675pt;"><h2>The Series of Documents - Call &amp; Response</h2></td></tr>
<tr>
<td>Date</td>
<td>Issuer</td>
<td>Language</td>
<td>Title</td>
</tr>
<tr>
<td>09-Sep-21</td>
<td>SBI</td>
<td>English</td>
<td><a href="https://www.sbigroup.co.jp/english/news/pdf/2021/0909_a_en.pdf" target="_blank" rel="noopener">Notice Regarding Commencement of Tender Offer</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Self-explanatory</td>
</tr>
<tr>
<td>09-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td>Acknowledgment of Tender Offer</td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Self-explanatory</td>
</tr>
<tr>
<td>17-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td><a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210917" target="_blank" rel="noopener">Notice of Introduction of Takeover Defense Measures</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Shinsei proposes a Poison Pill to be decided at an EGM</td>
</tr>
<tr>
<td>17-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td><a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210917_Announcement2_e.pdf" target="_blank" rel="noopener">Notice of Reservation of Opinion on TOB</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Shinsei says SBI's account is not completely accurate, clarifies 2019 proposal</td>
</tr>
<tr>
<td>17-Sep-21</td>
<td>SBI</td>
<td>Japanese</td>
<td><a href="https://www.sbigroup.co.jp/news/2021/0917_12649.html" target="_blank" rel="noopener">Notice Regarding the Tender Offer for Shinsei Bank</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>SBI says that the Poison Pill is a Delaying Tactic and is bad</td>
</tr>
<tr>
<td>24-Sep-21</td>
<td>SBI</td>
<td>English</td>
<td><a href="https://www.sbigroup.co.jp/english/news/pdf/2021/0924_a_en.pdf" target="_blank" rel="noopener">Notice Regarding Our Response to “Request for Extension of End Date of Tender Offer"</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>SBI Says will extend if Shinsei Responds to Four Points</td>
</tr>
<tr>
<td>27-Sep-21</td>
<td>Shinsei</td>
<td>English</td>
<td><a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210927_Announcement_e.pdf" target="_blank" rel="noopener">Notice Regarding Response from SBI Regional Holdings to Shinsei Questions</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Shinsei responds, saying four points irrelevant; ignores three questions</td>
</tr>
<tr>
<td>28-Sep-21</td>
<td>SBI</td>
<td>English</td>
<td><a href="https://www.sbigroup.co.jp/english/news/pdf/2021/0928_a_en.pdf" target="_blank" rel="noopener">Notice Regarding Our Response to “Questions to SBI"</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>SBI Provides responses to Shinsei's questions</td>
</tr>
<tr>
<td>29-Sep-21</td>
<td>SBI</td>
<td>Japanese</td>
<td><a href="https://www.sbigroup.co.jp/news/2021/0929_12663.html" target="_blank" rel="noopener">Notice Regarding Extension of TOB for Shinsei Bank</a></td>
</tr>
<tr>
<td colspan="3" style="text-align: center;"></td>
<td>Response indicating displeasure to Shinsei's responses to four points and three questions</td>
</tr>
</tbody>
</table>The interaction so far can be described as follows:<ol>
<li>SBI launches a TOB. Shinsei says "Oh no."</li>
<li>Shinsei says SBI's portrayal of the original approach was "inaccurate". Shinsei looks for a white knight, and launches a poison pill defense. </li>
<li>Then they both talk past each other. </li>
</ol>Most of the interaction so far has been utterly pointless. The only really interesting part of the entire charade has been the "clarification" that in the original 2019 proposal, SBI had proposed buying a large stake, having Shinsei then raise BVPS and EPS by buying shares in the market, then squeezing out minorities, then agreeing to buy back the government's stake at a much higher price. <div class="content-remarks">While it was utterly appropriate for Shinsei to reject that as a proposal, the failure of that proposal to gain traction was not so much in the content as it was in the way it was presented. SBI buys a stake, Shinsei buys back shares, and eventually accretion gets to a point where Shinsei can buy back the shares held by the government. That's a pretty story in hindsight. There was no good reason to lay it out for all to see initially. </div>So where we stand now is that Shinsei has launched the Poison Pill, both sides have established that they are talking past each other, and it will become a war of public relations with Shinsei trying to convince various parties who fundamentally don't want to approve a poison pill that this time it would be OK to do so. So we wait... In the meantime, there are some interesting things going on.

Since SBI Holdings (8473 JP) launched a Tender Offer to buy 27+% of Shinsei Bank (8303 JP) to take it to a 48% stake nearly three weeks ago, there has been considerable back and forth between the two parties - both directly in press releases and Opinion Statements - and through the press and speculation/opinion/commentary by disinterested third parties.The series of interactions in public in a kind of dual-path 'Call and Response' function is shown below. 






The Series of Documents - Call &amp; Response

Date
Issuer
Language
Title


09-Sep-21
SBI
English
Notice Regarding Commencement of Tender Offer



Self-explanatory


09-Sep-21
Shinsei
English
Acknowledgment of Tender Offer



Self-explanatory


17-Sep-21
Shinsei
English
Notice of Introduction of Takeover Defense Measures



Shinsei proposes a Poison Pill to be decided at an EGM


17-Sep-21
Shinsei
English
Notice of Reservation of Opinion on TOB



Shinsei says SBI's account is not completely accurate, clarifies 2019 proposal


17-Sep-21
SBI
Japanese
Notice Regarding the Tender Offer for Shinsei Bank



SBI says that the Poison Pill is a Delaying Tactic and is bad


24-Sep-21
SBI
English
Notice Regarding Our Response to “Request for Extension of End Date of Tender Offer"



SBI Says will extend if Shinsei Responds to Four Points


27-Sep-21
Shinsei
English
Notice Regarding Response from SBI Regional Holdings to Shinsei Questions



Shinsei responds, saying four points irrelevant; ignores three questions


28-Sep-21
SBI
English
Notice Regarding Our Response to “Questions to SBI"



SBI Provides responses to Shinsei's questions


29-Sep-21
SBI
Japanese
Notice Regarding Extension of TOB for Shinsei Bank



Response indicating displeasure to Shinsei's responses to four points and three questions


The interaction so far can be described as follows:
SBI launches a TOB. Shinsei says "Oh no."
Shinsei says SBI's portrayal of the original approach was "inaccurate". Shinsei looks for a white knight, and launches a poison pill defense. 
Then they both talk past each other. 
Most of the interaction so far has been utterly pointless. The only really interesting part of the entire charade has been the "clarification" that in the original 2019 proposal, SBI had proposed buying a large stake, having Shinsei then raise BVPS and EPS by buying shares in the market, then squeezing out minorities, then agreeing to buy back the government's stake at a much higher price. While it was utterly appropriate for Shinsei to reject that as a proposal, the failure of that proposal to gain traction was not so much in the content as it was in the way it was presented. SBI buys a stake, Shinsei buys back shares, and eventually accretion gets to a point where Shinsei can buy back the shares held by the government. That's a pretty story in hindsight. There was no good reason to lay it out for all to see initially. So where we stand now is that Shinsei has launched the Poison Pill, both sides have established that they are talking past each other, and it will become a war of public relations with Shinsei trying to convince various parties who fundamentally don't want to approve a poison pill that this time it would be OK to do so. So we wait... In the meantime, there are some interesting things going on.

SBI Shinsei Bank

SBI & Shinsei Talking Past Each Other