HK activist Oasis calls on GMO Internet to strengthen governance
18/01/2018 16:45
* Oasis Management makes 6 proposals for GMO Internet's AGM
* Calls for less CEO power, abolishing anti-takeover defence
* Oasis holds 5 pct of GMO Internet's shares
By Hideyuki Sano
TOKYO, Jan 19 (Reuters) - Hong Kong-based activist investor
Oasis Management Company has proposed that Japanese internet and
cryptocurrency firm GMO Internet 9449.T reduces the power of
its founder and abolishes its takeover defences.
The hedge fund said on Friday it had put forward six motions
to be discussed at GMO Internet's annual general meeting, which
is scheduled to take place in late March, in a growing sign
shareholder activism may be starting to take root in Japan.
Japanese Prime Minister Shinzo Abe has made corporate
governance reform one of the pillars of his efforts to
reinvigorate the country's economy.
Noting that GMO Internet's market value of 226 billion yen
($2 billion) falls short of the total of its eight listed
subsidiaries at 292 billion yen ($2.6 billion), Oasis said it
should be able to boost its value through better management.
"We think the firm has a unique business model, being a rare
Japanese internet firm with B2B focus, and has further room to
grow," said Takuya Shigaki, an analyst at Oasis. "But it has
been valued cheaply in the market because of governance."
GMO Internet has an extensive range of businesses, with
decision-making concentrated in its founder and CEO Masatoshi
Kumagai, who owns more than 40 percent of the firm's shares,
Oasis said.
The fund is calling for the setting up of a nominations
committee as well as the separation of the roles of president
and chairperson, on the grounds that the firm needs a stronger
board.
Oasis also proposed the firm abolish its anti-takeover
measures that do not need approval at a shareholder meeting.
GMO Internet has said the measures, which allow the board to
take some actions against any takeover, are necessary to ensure
shareholders will have expert views from the board.
The company has also said it is engaged in constructive
dialogue with investors.
Oasis has been a shareholder in GMO Internet for more than
six months and now holds more than five percent of its shares.
The share price rose 28 percent last year, outperforming a 19.7
percent rise in the overall Japanese share market .TOPX .
But they have been hit by a plunge in bitcoin this week and
closed down 2.2 percent at 1,912 yen, giving up all their gains
so far this year.
($1 = 111.20 yen)
(Reporting by Hideyuki Sano; editing by Alexander Smith)
((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))
Keywords: JAPAN STOCKS/ACTIVISTS GMO INTERNET