REG - AVI Japan Opport.Tst - AVI Urges Rohto to Focus on Core Businesses

AVI Japan Opportunity TrustAnnouncement

08/04/2025 17:45

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250408:nRSH2011Ea&default-theme=true

RNS Number : 2011E  AVI Japan Opportunity Trust PLC  08 April 2025

 

 

 

Public Campaign announced on AJOT Portfolio Company, Rohto Pharmaceutical

London, 8th April, 2025 - Asset Value Investors Limited ('AVI') launches a
campaign on one of AVI Japan Opportunity Trust's ("AJOT") portfolio companies,
Rohto Pharmaceutical (TSE: 4527, hereinafter 'Rohto'), calling on them to
focus on its core businesses rather than allocating resources to the
unsuccessful regenerative medicine business, and to engage with shareholders
more constructively to comply with the Tokyo Stock Exchange's ('TSE') request
for management that is conscious of the cost of capital and stock price. AVI
has published a detailed presentation on a dedicated website
(www.AwakeningRohto.com (http://www.AwakeningRohto.com) ).

Since AVI started investing in Rohto on behalf of AJOT in June 2024, AVI has
sought to engage in dialogue with the company, sending letters and
presentations, with the aim of improving corporate value in a sustainable
manner. However, AVI is deeply concerned by the company continuing to invest
in regenerative medicine, a business with no clear path to success, announcing
M&A deals at high valuations, and the sudden issuance of potentially
dilutive convertible bonds despite the low share price, resulting in a
stagnant share price.

AVI has sought to engage constructively in private dialogue with the board of
directors, however, to date, AVI has been able to meet with just one board
member, with the company repeatedly citing scheduling challenges. It is clear
to AVI that the company continues to neglect engaging in constructive dialogue
with investors, which is not in line with the TSE's request to listed
companies in Japan for "management that is conscious of the cost of capital
and stock price" .

In light of this, AVI has decided to launch a public campaign with the aim of
encouraging the sustainable improvement of corporate value.

Joe Bauernfreund, CIO and CEO of Asset Value Investors, comments:

"Rohto Pharmaceutical remains undervalued relative to skincare peers.
Throughout our time as shareholders of the company, through both AVI Global
Trust and AVI Japan Opportunity Trust, we have sought to engage constructively
with management on multiple occasions to focus on its profitable skincare and
eye drops businesses, whilst enhancing capital efficiency and IR
communications.

"Unfortunately, our attempts to engage with the Board of Rohto have not been
as successful as we hoped - having met with just one board member - and as
such we have made our campaign public. We believe that Rohto Pharmaceutical
has a superior underlying quality and growth opportunity within its sector and
we aim to encourage the Board to take action towards improving the corporate
value of the company."

Kazunari Sakai, AVI Japan's Head of Research, stated as follows

"The potential value of Rohto's core businesses, cosmetics and eye care, is
significant. However, the continued blind investment in its regenerative
medicine business is weighing on shareholder value and is restricting the
company's potential to realise its intrinsic value.

"AVI is confident Rohto's full valuation potential will be realised by
refocusing management's strategy and communicating this clearly to investors,
while urgently ending its disregard for the cost of capital and share price
conscious management requested by the Tokyo Stock Exchange."

 

-Ends-

 

About Asset Value Investors (AVI):

AVI is an investment management company established in London, United Kingdom,
in 1985. AVI has invested in Japanese equities for more than 40 years. AVI
manages AVI Global Trust (AGT) and AVI Japan Opportunity Trust (AJOT) and
other funds, collectively investing Y120bn (£1.8bn) into the Japanese market.
AGT and AJOT are public companies whose shares are listed and traded on the
main market of the London Stock Exchange.

Press Enquiries:

Quill PR - AVI@quillpr.com

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCSSUFMAEISEDL