Activist Oasis says Japan paper maker Hokuetsu's alliance plans 'overpromise and underdeliver'

Daio Paper

20/05/2024 07:45

By Anton Bridge
       TOKYO, May 20 (Reuters) - Activist investor Oasis
Management on Monday said Japanese paper manufacturer Hokuetsu's
 3865.T  plans for a strategic alliance with Daio Paper  3880.T 
lacked numerical details on where synergies could be gained.
    Oasis in a statement called the plan "a transparent attempt
by President Kishimoto to yet again overpromise and
underdeliver".
    The comments follow Oasis' call for the dismissal of CEO
Sekio Kishimoto and four independent directors in a shareholder
proposal earlier in May.
    Hokuetsu announced the alliance last week and said the firm
would also divest its cross-shareholding in Daio.
    Oasis said Hokuetsu's relationship with Daio had failed to
generate synergy in the more than 12 years since Hokuetsu first
acquired Daio shares.
    Hong Kong-based Oasis said it beneficially owns around 18%
of Hokuetsu shares and has been engaging with the company since
2019.
    Oasis separately submitted a shareholder proposal last week
against the reappointment of the chairman and two directors at
Kumagai Gumi  1861.T , arguing the construction firm's mid-term
plan aims to reduce capital efficiency even though it would
increase profit.
    Oasis also called for an increase in Kumagai Gumi's dividend
to bring it in line with peers.
    Shareholder activism is becoming more prevalent in Japan as
the government and regulators join investors in calling for
corporate governance change and improved shareholder value.
    In January, the Tokyo Stock Exchange began publishing names
of listed companies that have disclosed plans to raise capital
efficiency, in effect shaming those that have not.
    "Now that we have the form of governance we need the
substance of holding managers accountable," Oasis' founder and
Chief investment officer, Seth Fischer, said at a press briefing
in Tokyo on Monday.
    Last month, Oasis launched a campaign targeting cosmetics
and skin care company Kao  4452.T , calling on management to
prioritise foreign marketing and streamline its brand portfolio.
    Fischer will meet Kao's management in the coming weeks, he
said at the briefing.

 (Reporting by Anton Bridge; Editing by Christopher Cushing)
 ((Anton.Bridge@thomsonreuters.com;))