Japan's top venture capital firm yields to activist for massive buybacks
25/11/2022 13:07
By Makiko Yamazaki
TOKYO, Nov 25 (Reuters) - Japan's top venture capital
firm JAFCO Group Co Ltd 8595.T said on Friday it would buy
back shares worth 42 billion yen ($301 million) through a tender
offer, yielding to demands from a group of shareholders backed
by a prominent activist investor.
The tender offer, worth about a quarter of JAFCO's current
market value, would allow the investor group led by Yoshiaki
Murakami to exit their investments, JAFCO said, adding that the
group has agreed to sell all of their 19.53% stake.
The activist group had suggested that there was a
possibility of increasing their stake to 51%, and the prospect
of their larger ownership has caused some investors to refrain
from investing in JAFCO's funds, the company said.
JAFCO also said it would sell all of its 3.9% stake in
Nomura Holdings' 8604.T listed research affiliate Nomura
Research Institute Ltd (NRI) 4307.T to finance the buybacks.
The company's NRI shareholdings are worth about 80 billion
yen ($574.67 million) at Thursday's closing price of 3,370 yen
and after-tax sales proceeds would be about 52 billion yen, it
said. Nomura, Japan's largest investment bank, was a major
investor in JAFCO when it was founded in 1973.
The latest plan was mostly in line with demands from the
activist investor group, which had called for buybacks worth 50
billion yen using proceeds from NRI share sales.
The group's main fund, which is called City Index Eleventh,
could not be reached immediately for comment.
JAFCO also said it aims to improve capital efficiency and to
boost the ratio of return on equity (ROE) from the current 6% to
around 15% within five to six years.
($1 = 139.2100 yen)
(Reporting by Makiko Yamazaki, Editing by Louise Heavens)
((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))