Latest news with #activistInvestors
Japan Times
4 days ago
- Business
- Japan Times
Traders scouring annual meeting filings for traces of activist shareholdings
Traders are scouring notices of annual general meetings to pick up signals about activist holdings in Japanese companies, and profit from potential spikes in stock prices. Tucked away at the bottom of a company's annual general shareholder notices is a list of the firm's top 10 shareholders, which includes names of the investors or custodians that may hint at possible activist involvement. Sumitomo Osaka Cement and auto parts manufacturer KYB were among stocks that jumped last week after activist investor Aya Nomura's name appeared in annual general meeting (AGM) letters, listed as a stakeholder. Activist investors are growing their influence in Japan, having started 89 campaigns this year compared with last year's total of 153, according to compiled data. Most campaigns demand disposal of real estate, changes in strategy and stock buybacks. The AGM filings, usually released at around 8 a.m. Tokyo time, can be a window to identify large shareholders, some of whom may be activists taking exposure to push for higher investor returns in undervalued and cash-rich companies with low price-to-book ratios. At times it is tricky to determine the identity of the investor, who may be acting through an agent. A recent case involving an account on social media platform X, going by the user name Maron, underscores the complexity of figuring out identities. The Maron handle posted a screenshot of top shareholders of J. Front Retailing, including a name of a custodian that Maron speculated was linked to an activist, triggering a share price rally which spilled over to the rest of the sector. Maron didn't provide any detail on his or her identity or background in the account's response to a request for comment. "Shares tend to rise on expectations shareholder returns will increase,' as activist investors often target cash-rich companies to push for better capital allocation, said Sohei Takeuchi, a senior portfolio manager at Sumitomo Mitsui DS Asset Management. He added that companies and activists are more aligned than before following the Tokyo Stock Exchange's push to raise corporate value. More than 80% of Tokyo-listed companies, whose fiscal year ends in March, are expected to hold shareholder meetings in the last five days of June, according to a release from the Japan Exchange Group. Their shares will be closely watched in the days ahead, with the law requiring them to post notices at least two weeks before the meetings.
CNA
27-05-2025
- Business
- CNA
Salesforce to buy Informatica for $8 billion to bolster AI data tools
Salesforce said on Tuesday it would buy Informatica for about $8 billion, betting on the data management platform to sharpen its competitive edge in the booming artificial intelligence market. The cloud-software giant is returning to big-ticket M&A after years on the sidelines, driven by scrutiny from activist investors pressing for better profitability. It had last year shelved deal talks with Informatica after the companies failed to agree on deal terms. Buying Informatica, in its biggest deal since its nearly $28 billion acquisition of Slack Technologies in 2021, would help Salesforce expand its data management tools as it doubles down on artificial intelligence-powered products. The Informatica deal would allow Salesforce to tighten control over how business data is managed and used, an essential step as it races to embed generative AI deeper into its products. The company has been offering AI agents - programs that can handle routine work without human supervision - to businesses for tasks such as recruiting and customer service on its platform and in its messaging app Slack. It has closed more than 1,000 paid deals for "Agentforce", the company's platform for creating virtual representatives powered by AI, it said in December. The deal could face antitrust scrutiny as Salesforce's MuleSoft, which helps companies connect apps and data, operates in overlapping areas with Informatica. Salesforce is paying $25 for each share of Informatica, a premium of about 30 per cent to Informatica's closing price on May 22, the day before news of renewed talks emerged. The business software company has been a prolific dealmaker, buying data analytics firm Tableau Software in 2019 for $15.7 billion in stock, and Slack Technologies in 2021 in its biggest deal. Those deals drew scrutiny in 2023 when activist investors, including ValueAct Capital and Elliott Management, questioned Salesforce's strategy and pressed for changes to improve profitability.
Japan Times
15-05-2025
- Business
- Japan Times
Listed subsidiaries get the ax in Japan after investor pressure
Japanese conglomerates are scaling back their hundreds of listed subsidiaries, a structure that critics say is often a poor use of capital and raises potential conflicts of interest. The trend stems from mounting pressure on companies to cater to shareholders in response to activist campaigns, demands from the stock exchange and even hostile takeovers. Japan has 212 so-called parent-child listings, which is down from 285 in 2020, but still more than the 178 in Europe and 59 in the U.S., according to Jefferies Financial Group. "Japanese companies are becoming more selective about their assets, looking at whether subsidiaries are helping to increase their shareholder value,' said Chizuru Morishita, a researcher at NLI Research Institute. "Activist investors are becoming more powerful.' NTT, Japan's largest telecom company and a former state monopoly, said on May 8 it will take its data service unit NTT Data Group private. That followed its acquisition of its mobile service arm, NTT Docomo in 2020. The announcement came a day after another former state-owned firm Japan Tobacco said it would sell Torii Pharmaceutical, in which it has 55% stake, to Shionogi & Co. The wave has reached the country's biggest company by market capitalization, Toyota Motor. Bloomberg reported in late April that the carmaker's founding family has proposed a buyout of Toyota Industries, one of its many subsidiaries. The model for many investors is Hitachi, once known as having one of the most sprawling networks of subsidiaries in the country. It slashed them to zero in 2022 as it sharpened its business focus, selling many subsidiaries and buying out a few others deemed critical to its core business. The company's stock price has more than tripled since then. The pattern has strategists identifying companies which they speculate are likely to shed listed subsidiaries. Common names that appear in their lists include Nippon Steel, Sumitomo Chemical and retailer Aeon. David Mitchinson, a senior portfolio manager at U.K.-based Zennor Asset Management, says about 20% of his trades revolve around bets on the unwinding of subsidiary listings. "We think the pressure from the exchange and shareholders to resolve that kind of governance challenge is very impactful and very positive for the market,' he said. The Tokyo Stock Exchange, building on its success pushing low-valued companies to focus on measures to boost their market capitalization in 2023, has also taken aim at the issue, calling on companies to explain the benefits of the structure. In response, executives have opted to use capital more efficiently by focusing on their core strength, rather than investing in other firms. Up until now many companies have resorted to share buybacks, which boost earnings per share by reducing the outstanding shares as a quick fix to improve capital efficiency. "A few years ago, it was seen as an issue to tackle in the next 10 years, but due to pressure from the Tokyo Stock Exchange, the time-line has shortened, and the perception now is more like a five-year horizon,' said Daisuke Uchiyama, Senior Strategist at Okasan Securities. But some investors are wary of the rising popularity of bets to benefit from potential unwinding of parent-child listing. Yasuo Sakuma, president of Libra Investments, say there aren't as many opportunities as there seems. "You could buy companies that could be one day bought by their parent but the thing is, you never know when that will happen,' he said, noting the opportunity cost of holding such positions could be a headache. Nor is the trend only one way. Some tech companies, such as Softbank Group, Rakuten Group and GMO Internet, are seen as likely to continue to use listings of subsidiaries as a way to raise funds. LY, itself a subsidiary of SoftBank Group-led stock holding company, said just this month it plans to list its digital payment unit PayPay. More fundamentally, some investors say it is too simplistic to think parent-child delisting is always positive for minority shareholders. "It is not clear either whether taking a listed subsidiary private automatically leads to better governance,' said Richard Kaye, co-head of Japan equity strategy at Comgest Asset Management. The pressure to simplify corporate structures is likely to increase. Nicholas Smith, a strategist at CLSA, thinks companies may be incentivized to buy out subsidiaries earlier rather than later as the TSE is seeking to tighten its rule on management buyouts to protect minority shareholders from July. "Even though there are considerable concerns about the likely new rules for MBOs and buy-ins, the rules are likely to tighten,' he said. "A cynic would say that this is already causing a scramble to announce MBOs and buy-ins ahead of implementation of stricter rules.'
Japan Times
08-05-2025
- Business
- Japan Times
Japan's tycoon families seek buyouts to evade investor pressure
Akio Toyoda's $42 billion (¥6 trillion) plan to buy out Toyota Industries is the most dramatic example of a growing trend in Japan of founding families trying to take companies private. The Ito family, which owns 8% of Seven & I Holdings, tried unsuccessfully to engineer a management buyout to thwart a takeover offer of the retailer. The founding family of software developer Fuji Soft also made a failed attempt to buy out the firm in conjunction with Bain Capital. Taisho Pharmaceutical Holdings was bought by the Uehara family last year in a deal that valued the firm below its book value, drawing criticism from activist investors that the buyout price was set too low for the benefit of the Ueharas. Outdoor gear maker Snow Peak's founding family took the firm private in 2024 to push through an expansion strategy. The desire to delist stems from mounting pressure public companies face from investors and the threat of being acquired. A government guideline introduced in 2023 has made it difficult for listed companies to flatly reject any serious takeover proposals. Additionally, the Tokyo Stock Exchange has pushed firms to focus more on shareholders' demands, emboldening activist investors. "The cost of being listed has risen,' said Hidenori Yoshikawa, an analyst at Daiwa Institute of Research. "They have to deal with activist investors and the risk of unsolicited takeovers.' The impetus to go private extends beyond founding families. The number of management buyouts in Japan jumped almost 50% to 37 last year, according to data compiled by Bloomberg. The pace hasn't changed so far this year, with 10 such deals already announced through mid-April. The deals are valued at about $4.5 billion, according to data compiled by Bloomberg, and look set to jump to a record level if Akio Toyoda goes ahead with the planned buyout of Toyota Industries. Fears of being acquired are rising among Japanese companies after Canada's Alimentation Couche-Tard made an unsolicited, but what it calls a friendly, takeover bid to Seven & I. "People look at Seven & I Holdings and thought even if you are a ¥5 trillion company, you can become a takeover target,' said Tetsuro Ii, chief executive of Commons Asset Management. The owner of the country's ubiquitous 7-Eleven convenience stores was built into a global empire by Masatoshi Ito. Despite the Ito family having the largest stake in the company, its involvement in the firm has dwindled. "In the grand scheme of things, the logic of the equity market will filter through. I think executives know that the best. They know they can't control a firm when they only have a small stake, like say 5%,' said Yoshiki Nagata, CIO of enTorch Capital Partners. In many cases, pressure from investors, or just the mere fear of it, works as a catalyst for MBOs. In March, Topcon got a management buyout offer, which valued the optical equipment maker at about ¥358 billion. The deal came on the heels of calls from U.S. activist investor ValueAct Capital for the company to sell some operations or go private. The number of firms listed in the three main sections of the Tokyo Stock Exchange has declined by 0.4% so far this year as delisting outnumbered new listings. "When companies see activists buying one of their competitors, they often become worried that they could become target, themselves,' said Takahiro Nakazawa, the director of Mizuho Trust & Banking's stock transfer agency department. Delisting, including MBOs, is a major exit strategy for activists, too, as buyers often pay a hefty premium to purchase stakes held by minority shareholders. Investors often welcome the exit from the market of companies perceived as not paying enough attention to shareholders' interest. They have long complained that the Tokyo Stock Exchange is putting quantity over quality, allowing too many lackluster companies to be listed.
