Last week I sold my shares in Uehara Sei Shoji (TYO:8148). The company announced a management buyout in November and launched a tender offer at ¥5150. In December, the results were announced and if I read the filing correctly, just over 2 million shares were tendered. As a result, the management now owns ~83% of the outstanding shares. Apparently they are now looking to delist the company. They said they will make a further announcement about the specific procedures for all this.
I have no idea what will happen exactly and if minority shareholders will be squeezed out or if there is a possibility that they will end up holding shares in an unlisted stock. Since there was a bid in the market at ¥5130, and the original tender price was ¥5150, it made sense to me to sell.
It looks like management is getting a great bargain here, because at the tender price of ¥5150 the company is trading at 0.67x NCAV and 0.48x book value. The company is loaded with cash as well. I’m surprised so many shareholders tendered their shares. It is still a solid result for this position though. I think I bought my shares around ¥2750 (split adjusted), so this means a gain of around 87%. My holding period was a little over two years.
I did find a new position for the Japanese basket and I’ve just updated that post with the name and financial data of the company. Since Uehara Sei Shoji was one of the larger positions in the basket, I decided to use only part of the sale proceeds for this new position and to use the rest to buy a bit more of a couple of existing positions.
Disclosure: no position in Uehara Sei Shoji (TYO:8148)