Japan's Cosmo braces for 'poison pill' anti-activist vote (updated)

Cosmo Energy Holdings Co

11/11/2023 24:27

(This Nov. 10 story was updated on Nov. 11 with explanation of
majority of minority votes in paragraph 9)
    By Makiko Yamazaki and Yuka Obayashi
       TOKYO, Nov 10 (Reuters) - Japan's Cosmo Energy Holdings
 5021.T  could struggle to win shareholder backing for a revised
"poison pill" strategy, its chief executive said on Friday, as
the company seeks to defend itself from activist investors
pursuing a hostile takeover.
    Japan's third-biggest oil refiner is calling another
shareholder vote on Dec. 14 to seek approval to discourage an
activist group led by Yoshiaki Murakami from increasing its
stake to 24.56% from its current 20%.
    "We are fighting against heavy odds, as we know that certain
investors flatly oppose any takeover defence," CEO Shigeru
Yamada told Reuters in an interview.
    Cosmo has for more than a year been trying to fight off
Murakami.
    In June, a previous vote on a poison pill to dilute the
activists' stake if they buy more shares without following set
procedures succeeded.
    The upcoming vote is whether to block further purchases by
the activists even when they comply with the set procedures.
    Yamada said the company this time decided against adopting
the tactic introduced in June, known as "a majority of minority
vote", because its use could detract from the fundamental
question of who would be best suited to increasing the value of
the company.
    "We want to ask shareholders whose plans can boost the
shareholder value, ours or Murakami-san?" he said.
    Majority of minority votes prevent specific shareholders
from voting, a practice some governance experts say could serve
as a new weapon against shareholder activism.
    Yamada said the Murakami group does not have a concrete
management strategy to improve Cosmo's corporate value.
    The group, which says Cosmo's shares are undervalued, has
floated ideas such as consolidating refineries and selling off
the oil and gas development unit.
    Yamada said refineries and oil and gas development will be
the companies core business until around 2030 and consolidation
or selling them would undermine shareholders' interests.

 (Reporting by Makiko Yamazaki and Yuka Obayashi; editing by
Barbara Lewis and Christian Schmollinger)
 ((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))