Nippon Active Value to get win from Intage offer? – Rising Sun Management, Nippon Active Value’s investment adviser, has offered to buy 100% of Japanese marketing research firm Intage Holdings for JPY1900 per share through its Japanese vehicle Hikari Acquisition KK. The offer values Intage at approximately JPY76.7bn.
Paul ffolkes Davis, chairman of Rising Sun Management, made the offer in a letter delivered on 7 February 2022 to Mr Noriaki Ishizuka, president and representative director for Intage Holdings. “We expect you to now convene an ‘independent committee’ as described by Japanese M&A guidance rules to evaluate our offer,” Mr ffolkes Davis said in the letter. The offer is subject to financing and approval by the board of Intage Holdings.
On the 27th January 2022 Rising Sun Management sent a letter to Intage Holdings urging that it undertake immediate preparations to organise a management buyout. This followed a filing on the 18th January 2022 which showed that Nippon Active Value Fund, in combination with two other funds advised by Rising Sun – Earl 1927 LLC and Michael 1925 LLC – held 4.1m common shares in Intage, making the group the company’s biggest shareholder with a 10.17% stake.
Mr ffolkes Davis added: “We remain convinced that the immediate future of Intage Holdings should be as a private company, able to pursue its various initiatives away from the glare of the public market. As we have always said, we are keen to achieve this outcome in the spirit of friendly co-operation. We still hold this aspiration, and we hope you will too.”
In the past, Rising Sun Management has highlighted several areas of concern with how Intage is managed. They include:
- Lack of widely held stock incentives for management and employees
- An unsuitably expansionist acquisition policy lacking sufficient financial returns
- Slow progress in digitising operations and low levels of automation in the business generally
Intage’s shares are still trading below the JPY1900 offer price, which might suggest that the market doesn’t think the offer has much chance of succeeding – we’ll see.
NAVF : Nippon Active Value to get win from Intage offer?