A blue-chip takeover candidate

Iconic brand, global growth, with 50% of market cap in cash (8x EV/EBIT)

In my previous post, I covered the details of METI’s 2023 “Takeover Guidelines” and its implications on the Japanese market.

One of the takeaways for me was that we may be entering a new era of inbound M&As in Japan, with more Japanese companies becoming viable takeover targets for foreign acquirers, facilitated by a pro-M&A policy shift. Imagine if Couche-tard’s bid for Seven & I is just the tip of the iceberg.

This raises the question: Who’s the “next Seven & I”? In this post, I will spotlight a large blue-chip company:

• A ripe takeover target that foreign acquirers should be eyeing with interest.

• Not only are the assets valuable, but strategic acquirers also have a realistic shot at obtaining control.

• It’s always fun to speculate on a takeover but I certainly recognize that it may not happen. However, this is not a binary bet — value can be unlocked even if an actual takeover doesn’t materialize. There are more than one way to win.

I hope this highlights not only an interesting company, but also a framework that readers can use to identify good setups.

FWIW — my last takeover pick, Descente, was acquired three months after I published my writeup, for a 35% gain (below article).