3 days ago
Fuji Media shares dip after company floats poison pill defense
Fuji Media Holdings shares fell 4.2% after the broadcaster said it's considering measures to stop one of Japan's most prominent activist investors from gaining control of the firm.
Since February, the Japanese entertainment and news conglomerate held several meetings with activist investor Yoshiaki Murakami and his daughter Aya Nomura, according to a company statement Thursday.
Entities associated with the two have floated the possibility of increasing their combined stake to 33.3%, it said. Such affiliates together held 15.06% as of July 1.
Fuji Media said it will consider issuing free stock acquisition rights if an investor buys up 20% or more of its voting shares. The strategy, often referred to as a poison pill, would allow all shareholders to exercise the right to buy more shares, thereby potentially diluting the ownership of large shareholders. Fuji Media denied that this was a poison pill.
This week, Reno, a company affiliated with the Murakami Fund, further demanded the Tokyo company consider spinning off a subsidiary that Murakami would take control of, Fuji Media said. The activist group may act to maximize its own interests, rather than the interests of all shareholders, should it gain sway over the broadcaster's management, Fuji Media said.
"This does not leave a good first impression,' said Naoki Fujiwara, senior fund manager at Shinkin Asset Management. The stock price decline reflects fears that the activists' influence may be diluted, he said, adding that Fuji Media's move was effectively a poison pill that may be used by management to protect itself.
Fuji Media — an entertainment giant that spans TV and satellite broadcasters as well as games and music — has been struggling to recover from a sex assault scandal that's pummeled its reputation and cost it sponsors and viewers. It's been in a standoff against activist investors including Dalton Investments, which had called for more accountability as well as a spinoff of its real estate operations.
