Orbis Responds to Public Statements by Tsuruha on Proposed Tsuruha-Welcia Merger and Subsequent Tender Offer by AEON
LONDON--(BUSINESS WIRE)--Orbis Investments ('Orbis'), which held 9.7% of Tsuruha Holdings Inc. ('Tsuruha') as of 28 February 2025 on behalf of its clients, notes the recent public statements by Tsuruha regarding its proposed merger with Welcia Holdings Co., Ltd. ('Welcia'), a company controlled by AEON Co., Ltd. ('AEON'), and the subsequent partial tender offer by AEON to take control of Tsuruha.
Tsuruha Should Receive a Control Premium from Welcia
In a press release dated 14 May 2025, Tsuruha stated that the share exchange ratio '…is considered favourable for [Tsuruha] shareholders when compared to the average premium levels observed in recent cases of full ownership acquisitions through share exchanges with similar characteristics.'
This statement is, in Orbis' view, deeply misguided. Orbis fundamentally disagrees with the assertion that Tsuruha should pay a control premium for Welcia. Although the proposed merger is structured with Tsuruha as the surviving entity, it is an essential component of a series of transactions which would allow AEON to take control of Tsuruha. As such, shareholders in Tsuruha should receive—not pay—a control premium.
Both ISS and Glass Lewis have noted that AEON is taking control of Tsuruha without paying such a premium to Tsuruha shareholders. Both recognise that it is AEON-controlled Welcia—not Tsuruha—that should be paying a premium in this transaction. The fact that Tsuruha is instead paying one makes the share exchange ratio inappropriate and highly unfavourable to its shareholders.
Protections for Management, not Minority Shareholders
On 15 May 2025, Tsuruha published responses to shareholder FAQs regarding the proposed business integration. The company noted that:
The final agreement with AEON includes provisions to impose certain restrictions on AEON's exercise of control or influence, thereby ensuring the independence of Tsuruha management and protecting the interests of its minority shareholders .
. AEON has agreed not to transfer or dispose of Tsuruha shares without prior consent and will not acquire more shares without Tsuruha's approval.
AEON may appoint only one non-executive director to Tsuruha's board.
It plans to appoint a new independent outside director who meets Tokyo Stock Exchange independence standards.
Orbis believes that these provisions would serve primarily to entrench the position of Tsuruha's incumbent board and management. While the agreement with AEON provides certain safeguards for Tsuruha management, it offers no meaningful protection for minority shareholders, who will lose their ability to influence the company's direction or to hold leadership to account under AEON's effective control.
Orbis is also concerned that minority shareholders would face significant governance risks as minorities in a listed AEON subsidiary—including the potential for AEON to take the merged entity private on highly unfavourable terms for minorities.
A Flawed Process, Unfavourable Terms, and Unanswered Questions
Orbis supports industry consolidation—which can realise substantial merger benefits—when it is pursued through a fair and transparent process and on equitable terms. However, Orbis strongly objects to both the terms and structure of these transactions, and notes fundamental flaws in the process that led to Tsuruha's decision to enter a Capital and Business Alliance with AEON and Welcia in February 2024. Orbis believes that both the proposed merger and the subsequent tender offer severely undervalue Tsuruha.
Orbis calls on Tsuruha to answer two key outstanding questions:
Why should AEON be allowed to take a controlling position in Tsuruha via a partial tender offer at a nearly 27% discount to the price it paid to acquire a non-controlling stake from Oasis Asset Management in March 2024?
Did the Tsuruha board form an independent special committee to conduct a market check, soliciting alternative bids before its February 2024 decision—and if so, will it now provide transparency on that process and its findings?
Orbis Urges Investors to Vote AGAINST the Proposed Merger at the 26 May AGM
Orbis calls on all shareholders who care about the fairness and integrity of capital markets to vote AGAINST the proposed merger at the upcoming 26 May 2025 Annual General Meeting. The merger requires a two-thirds majority, and is the only opportunity for Tsuruha shareholders to vote on one of the series of transactions that would hand control of Tsuruha to AEON at a steep discount to fair value.
The information contained in this press release is intended solely to share Orbis' views as a long-term shareholder in Tsuruha Holdings Inc. It does not constitute any solicitation to exercise shareholders' voting rights (either independently or jointly with Orbis) or to delegate such rights to Orbis, and Orbis is not seeking any shareholders' agreement regarding voting. Orbis is not soliciting or accepting any proxies, and encourages all shareholders to make their own voting decisions based on publicly available information and their own judgement. This press release reflects Orbis' opinions exclusively. Nothing in this press release constitutes investment advice.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
US Congress seeks to boost Navy and Air Force fleets in 2026 bill
By Mike Stone WASHINGTON (Reuters) -The House Appropriations Committee's Defense subcommittee released its draft bill for fiscal-year 2026 late on Tuesday, which aims to buy one additional F-35 jet versus the Pentagon's 2025 budget request and make investments in naval vessels, and missile defenses. The powerful committee's draft of its version of the 2026 purchasing bill was released ahead of any formal input from the Trump administration's Pentagon - which has been delayed. The language in the bill shows the Republican-controlled Congress' continued focus on modernizing the U.S. armed forces but sets up a tug of war with the Pentagon over what could be conflicting priorities. The bill, which still needs input from the full House and Senate, directs the Pentagon to buy 69 Lockheed Martin F-35 fighters for $8.5 billion, 15 Boeing KC-46 aerial refueling tankers for $2.7 billion, and three F-15EX aircraft for $345 million as well as $3.8 billion in funding for Northrop Grumman's B-21 stealth bomber program. The Pentagon's 2026 budget request, which has not been released, requests 47 F-35s, according to media reports. The Navy's non-fighter aviation procurement includes four E-2D Advanced Hawkeye aircraft for $1.2 billion and 19 CH-53K heavy transport helicopters for $2 billion. The bill also emphasizes missile defense, with approximately $13 billion to Missile Defense Agency and the Space Force program's support of the "Golden Dome" initiative. This money would be above the approximately $25 billion that Congress has earmarked for Golden Dome in its reconciliation bill. The committee's draft bill would also give military personnel a 3.8% increase in basic pay, effective January 1, 2026. The bill directs the Pentagon to procure 28 naval vessels, including two Virginia-class submarines made by General Dynamics at $6.2 billion. The Columbia-class submarine program would receive $5.3 billion. Both programs have additional funding for advance procurement underscoring the strategic importance of the United States' underwater fleet. Surface fleet additions would include two DDG-51 destroyers, refueling ships, towing and rescue ships and surveillance vessels.
Yahoo
4 hours ago
- Yahoo
Bad news for Tesla: Britain is going bonkers for Chinese cars
Sales of BYD and other Chinese EVs are surging in tariff-free UK, even as Tesla's plummet. One analyst told BI it's proof that in a straight fight, BYD can quickly take market share from legacy automakers. The US imposed 100% tariffs on Chinese EVs last year, and Elon Musk warned that they could "demolish" Western rivals. Tesla might be safe from Chinese EV competition in the US — but across the Atlantic in the UK, China's automakers are booming. Sales of Chinese cars have surged this year in Britain, even as Tesla's sales have cratered, with the likes of BYD growing at enormous speed in the tariff-free market. According to data from the Society of Motor Manufacturers and Traders, vehicles manufactured in China made up 9.4% of all UK sales in May, up from 7.7% in April, and up from 5.5% in May 2024. The surge was driven by BYD. The Chinese EV giant recorded a 400% rise in sales from a year earlier, while Polestar, which is owned by Chinese conglomerate Geely, saw its sales spike by nearly 300%. In contrast to its Chinese rivals, Tesla, which is battling a global sales slump amid protests and backlash against CEO Elon Musk's political interventions, saw its sales collapse 36% in the UK in May. Unlike the US and Europe, the UK has not imposed tariffs on Chinese EVs, and JATO Dynamics analyst Felipe Munoz told Business Insider that the lack of import taxes made the UK a "free market" for Chinese carmakers. In the US, Chinese electric cars were hit with a 100% tariff last year, while the European Union has imposed import taxes of up to 35% on specific manufacturers, with BYD facing a 17% tariff. Munoz said the growing popularity of Chinese cars in the UK offers evidence that the likes of BYD can quickly take market share from Tesla and legacy automakers. "It's sending a message to the legacy carmakers, Tesla and many others, that the Chinese can gain market share very easily, because their cars are very competitive compared to what you see in the legacy carmakers," said Munoz. Munoz said Chinese-controlled firms like BYD and MG, a historic British brand now owned by Chinese company SAIC, had achieved success in the UK by offering a broad spectrum of new models, including both EVs and plug-in hybrids. He added that BYD was introducing new, high-quality models at such competitive prices so quickly in the UK that it was outweighing the lack of brand awareness that usually limits the growth of carmakers when they enter a new market. BYD's cheapest model in the UK, the Dolphin Surf hatchback, is expected to cost around £18,000 ($24,500) when it goes on sale this week, more than £20,000 ($27,000) less than the starting price of Tesla's Model 3. While Tesla sales slumped, US automaker did manage to outsell Jaecoo and Omoda, two relatively unknown Chinese brands that beat Tesla in April, but lagged behind BYD and MG. Tesla's struggles in the UK are a dire warning for the company as it faces growing competition from Chinese carmakers around the globe. The rapid rise of BYD and its rivals has sent shockwaves throughout the auto industry, with Chinese carmakers putting Western and Japanese carmakers in China under severe pressure with a wave of affordable, high-tech electric and hybrid cars. Now, many of those Chinese automakers are eyeing global expansion, with BYD vowing to sell half of its cars overseas by 2030, according to a recent report from Reuters. Musk himself warned last year that without trade barriers, Chinese carmakers would "demolish" their Western rivals — and what's happening in the UK seems to be proving him right. Ultimately, Munoz said the growing popularity of Chinese cars in the UK offers evidence that, in a straight fight, the likes of BYD can quickly take market share from Tesla and legacy automakers. The analyst said that while tariffs would slow BYD and its rivals down, it was unlikely to stop them entirely. Munoz pointed to BYD's growing sales in Europe, where the brand has adapted its strategy to deal with the EU's 17% tariff by selling more hybrid cars, which are exempt from tariffs. "With or without tariffs, these guys are coming. The tariffs are not going to stop them," he said. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Yahoo
Peru, the US's top blueberry supplier, looks to China as tariffs hit
STORY: For more than a decade, Peru's blueberries have rolled north to U.S. supermarket shelves. But now, growers are looking at markets in China amid the new U.S. tariffs. China has insatiable demand and has built a huge new port near Lima that cuts shipping time across the Pacific in half. Miguel Bentin is a general manager of major blueberry producer, the Valle y Pampa farm. "I believe the full potential of the Chinese market for our products has not yet been fully realized." He said the farm began production in 2012 when the blueberry harvest was a tenth of the size it is today. Thanks to genetic innovations, varieties like Eureka Sunset can now grow in arid landscapes like the Pisco Desert. The farm typically ships 60% of its blueberries to the United States and the rest to Europe. This year, though, it is planning its first big Chinese shipment to mitigate the impact of 10% in U.S. tariffs. Peru overtook Chile in 2021 as the world's largest exporter of blueberries. According to Peru's Foreign Trade and Tourism Ministry, U.S. tariffs could slow the fruit's booming rise, that boosted Peru's exports by some $2.3 billion last year. Seller Kelly Montalvo told Reuters in May that the tariffs have affected her business because people buy less when the produce becomes more expensive. Exports of blueberries dipped 30% year-on-year in the first quarter of this year, due to a change in harvest timing. Even as quarterly U.S. shipments ticked down, those to China rose from a lower base. Bentin is forecasting a noticeable increase to China as the harvest begins to peak around August. Peru's new Chinese-controlled port of Chancay cuts the sea journey times to Asia in half to just around 20 days - a big plus for keeping fruit fresh. Bentin called the port a "game changer". Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
