Sanken Electric (6707.T), mcap=$900m, price ¥4870 vs. ¥4990

Pitch: Japan-based semiconductor company trading at a fraction of its 52% stake in ALGM. On top of that Sanken generates $850m in revenues from its power semiconductor business. Activist Effisimo launched tender in Feb’21, accumulated 20% ownership, and might aim for a 30% stake. The activist was previously successfully involved in the Toshiba split-up and might help to close the discount to SOTP value here as well.

Valuation:
Core Sanken ($400m, at 10xEBITDA),
plus $ALGM stake ($2900m),
less tax on theoretical $ALGM sale (-$300m),
less debt (-$600),
less preferred (-$280m),
results in $2600m equity.

Exp. gain: 140%

Full 6707.T write-up (free guest account required):
https://valueinvestorsclub.com/idea/Sanken_Electric/0743989076

 

Published on: May 6, 2022  •  Published by:
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