NEW YORK & TOKYO--(BUSINESS WIRE)--Symphony Financial Partners Co., Ltd. (“Symphony”), a leading Asia-based asset management company, has facilitated the management buyout of Sanjo Machine Works Ltd. (“Sanjo”; 6437 JP), a company engaged in the manufacture and sale of automobile engine parts, general machinery and dies, with gross revenues of ¥10.7 billion. Murata Shoji K.K., a special purpose company established by the president of Sanjo to conduct the buyout, will offer to buy 100% of the shares outstanding at ¥468 per share. This opportunity was created by Symphony through intensive discussions and price negotiations with management over the past year.
Symphony advises The SFP Value Realization Master Fund Ltd. (the “Fund”), Sanjo’s largest shareholder. The Fund will tender its entire 23% stake in the offering to Murata Shoji K.K. The tender price is a 135% premium to today’s close of ¥199 and a 139% premium to the 6-month moving average. This represents one of the largest tender offer premiums ever offered in Japan and the second time in 12 months Symphony has received over 100% premium in a tender offer. Symphony concluded a similar deal last year selling its 9% stake in Aloka Corp., a global leader in the diagnostic ultrasound medical equipment Industry with sales of ¥50 billion, to Hitachi Medical Corp. at 119% premium in a strategic sale.
The Fund has been a long-term shareholder in Sanjo, supporting management in numerous ways. The Fund has long felt that Sanjo would be better off delisting.
“We applaud management’s decision to delist Sanjo at a substantial premium to recent market prices. The market wasn’t properly valuing the company. When we explained the situation to management, they agreed to step in and corrected the mispricing for the benefit of all stakeholders. This transaction exemplifies Symphony’s expertise in generating returns through the execution of non-confrontational value enhancing activities in Japan,” said David Baran, Co-CEO of Symphony.
The Fund is also credited with achieving the only hedge fund-led management buyout in Japan, when it facilitated a similar deal with Central Uni, a hospital equipment firm with ¥17.4 billion in gross revenues in 2007. As a market leader in “engaged investing” in Japan, it is also the only Fund to have successfully defeated the introduction of the poison pill.
“The team at Symphony is constantly looking for ways to deliver non-correlated returns to its limited partners. Unlocking value in Japanese equities is challenging, but if done properly, it’s ultimately financially rewarding,” added Kazuhiko Shibata, Co- CEO of Symphony.
About Symphony Financial Partners
Symphony Financial Partners Co., Ltd., the advisor to The SFP Value Realization Master Fund Ltd. and Sinfonietta Master Fund, an Asia macro fund, is an Asia-focused asset manager with offices in Tokyo and Singapore. The Firm was founded in 2000 by David Baran and Kazuhiko Shibata, veteran finance professionals with decades of experience in Asian markets. The investment team has been working together since 2003 and has extensive expertise in trading and analysis over a broad range of areas including Asian equity/equity derivatives, FX, credit, event-driven trading, M&A and corporate advisory.
About SFP Value Realization Master Fund
The SFP Value Realization Master Fund Ltd. is a Japanese equity fund investing in profitable, asset-rich companies at discounts to intrinsic value and works with company management to introduce change that will result in a positive re-valuation of the company. The Fund is widely recognized as the market leader in engaged investing in Japan, with an extensive track record of event creation in its portfolio.