2 days ago
3D urges shareholders to reject new term for Nippon Steel heads
Singapore-based 3D Investment Partners has urged other shareholders in Nippon Steel to vote against reappointing its president and vice chairman, both of whom have championed a drawn-out U.S. takeover that threatens "irreversible' value destruction.
Nippon Steel's large-scale capital investment plan that is estimated to reach ¥10 trillion ($69 billion) "significantly' exceeds the company's market value, thereby "heightening the risk of irreversible damage to corporate value,' 3D said in a statement ahead of the steelmaker's June 24 annual general shareholder meeting. The steelmaker's market value is about ¥3 trillion on Tuesday, compiled data show.
The Tokyo-based company's investment plan includes the acquisition of United States Steel, additional investments in U.S. Steel, and de-carbonization initiatives. Nippon Steel operates "with a capital allocation policy that lacks both transparency and discipline,' 3D said.
The criticism comes as Japan's largest steelmaker has stuck with its plan to purchase U.S. Steel through a long and messy political storm, even after the White House under then-U.S. President Joe Biden blocked it in January. Nippon Steel is on pace to finalize the combination with U.S. President Donald Trump's administration before a deal deadline later this month, it was reported last week.
The $14.1 billion cash acquisition was already pricey — a 142% premium to the level shares were trading at before U.S. Steel effectively put itself on sale in 2023 — and now comes with costly commitments and the looming prospect of political intervention.
A Nippon Steel spokesperson declined to comment on matters concerning individual shareholders.
Nippon Steel President Tadashi Imai bears responsibility for raising concerns about damage to its corporate value, while Vice Chairman Takahiro Mori, as the finance and investor relations officer, has abandoned his duty to explain such capital allocation decisions, 3D said.
3D has had discussions with Nippon Steel, and during one session, it requested that the acquisition of U.S. Steel be put to a shareholder vote, but this was rejected by Nippon Steel, according to the statement.
The Singaporean investment firm has been an active player in Japan, taking stakes in companies including alcoholic beverage maker Sapporo Holdings, drug wholesaler Toho Holdings and women's underwear company Wacoal Holdings.
