REG - Nippon Active Value - Portfolio Update

Intage HoldingsAnnouncement

27/01/2022 10:25

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RNS Number : 8460Z  Nippon Active Value Fund PLC  27 January 2022

Update on portfolio holding

 

Nippon Active Value Fund urges Intage Holdings to undertake a management
buyout

 

London / Tokyo, 27 January 2022: Rising Sun Management ("RSM"), the
investment advisor to Nippon Active Value Fund ("NAVF"), an activist,
Japan-focused Investment Trust, has sent a letter to the management of Intage
Holdings (Bloomberg Ticker: "4326 JP Equity"), a Japanese marketing research
firm, urging that it undertake a management buyout ("MBO") of the company.

 

The letter noted a filing on January 18, 2022 that showed NAVF in combination
with Earl 1927 LLC and Michael 1925 LLC (the "Investor Group") now hold 4.1
million common shares in Intage, making the Investor Group the company's
biggest shareholder with a 10.17% stake. RSM also represents the Earl and
Michael LLC vehicles.

 

The letter (which can be seen at NAVF's website:
www.nipponactivevaluefund.com) highlighted several areas of concern with how
Intage is managed. They include:

 

·    Lack of widely held stock incentives for management and employees

·    An unsuitably expansionist acquisition policy lacking sufficient
financial returns

·    Slow progress in digitising operations and low levels of automation
in the business generally

 

"We urge Intage Holdings to undertake immediate preparations to organise a
management buyout that will comply with the Japanese government's continued
policy to align employee compensation with the economic interests of the
company's owners," said Paul ffolkes Davis, Chairman of RSM, the investment
advisor to NAVF.

 

NAVF is an activist investor which draws on the RSM team's significant
Japanese market knowledge and their two decades of successful intervention to
generate uncorrelated returns. Many Japanese companies are under-researched,
show rising balance sheet cash reserves and have questionable capital
allocation policies. NAVF seeks to engage with investee company management
teams to promote value enhancing corporate reorganisation and capital
allocation strategies that can result in significantly improved returns for
stakeholders, including both employees and shareholders.

 

In 2021, NAVF having acquired a 6% stake in Sakai Ovex, then led a campaign to
pressure the company's management to conduct an MBO, arguing that the firm was
significantly undervalued by the market. NAVF first proposed an MBO at ¥2350,
and after being joined by like-minded investors, this eventually rose to
¥3810. The successful MBO crystalised a more than 100% gain for the Fund's
investment in Sakai Ovex.

 

 

-END-

 

 

NOTES TO EDITORS

 

About NAVF

Nippon Active Value Fund ("NAVF") is an Investment Trust listed on the
Specialist Fund Segment of the London Stock Exchange. The investment advisor
of the Fund is Rising Sun Management Limited ("RSM"). NAVF is targeting
attractive levels of capital growth for shareholders from the active
management of a focused portfolio of quoted small cap Japanese equity
investments. RSM targets companies which it sees as attractive, undervalued
and which have a substantial proportion of their market capitalisation held in
cash and/or listed securities and/or realisable assets.

 

Media Enquiries:

 

Alex Gorokhov

alex.gorokhov@peregrinecommunications.com
(mailto:alex.gorokhov@peregrinecommunications.com)

Peregrine Communications

+44 203 178 6868

 

Bill McIntosh

bill.mcintosh@peregrinecommunications.com
(mailto:bill.mcintosh@peregrinecommunications.com)

Peregrine Communications

+44 203 178 6868

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