Japan activist shareholder Murakami fails in bid for printing firm Kosaido

Kosaido Holdings

23/05/2019 10:20

By Junko Fujita
    TOKYO, May 23 (Reuters) - Veteran activist shareholder
Yoshiaki Murakami has failed to acquire a majority stake in
printing firm Kosaido Co  7868.T , his funds said on Thursday,
blaming the setback on the entrenched practices of corporate
Japan.
    The failure of the country's most prominent activist
shareholder to buy control of the little-known company is likely
to be seen as a victory for the old guard of Japan Inc, even as
a new corporate code under Prime Minister Shinzo Abe has called
on firms to boost returns and improve governance.
    Kosaido on Thursday said shareholders had tendered 427,000
shares in the buy-out offer that expired a day earlier, or less
than 5 percent of the minimum Murakami had sought. He was
seeking to boost his stake to at least half and had offered 750
yen a share.
    His bid was less successful than the failed management
buyout attempt in April backed by Bain Capital, where
shareholders tendered more than 5 million shares at the lower
price of 700 yen, a difference his funds ascribed to the cozy
relationships of corporate Japan. 
    "More shareholders tendered their shares to the management
buyout even though that offer price was lower than ours," the
two Murakami-backed funds, Minami Aoyama Fudosan and Reno, said
in a statement. Together his funds own around 13.5 percent of
Kosaido.
    "We would have to think that among those who tendered their
shares to the management buyout but didn't tender to our higher
bid are listed companies whose shares are owned by Kosaido
through cross-shareholding."
    Murakami has long battled against the practice of
cross-shareholding, where companies hold stakes in each other to
cement business ties. Critics, including Murakami, say the
system protects boards at the expense of shareholders, leading
to poor returns and shoddy corporate governance.
    A former bureaucrat, he famously led a fund targeting
Japanese companies and pushing for greater shareholder returns
until he was convicted of insider trading in 2007. He has since
resurfaced as an investor, working with his daughter.
    Kosaido emerged earlier this year as the unlikely
battleground between Murakami and Bain Capital, after both made
competing bids for it, and Kosaido's stake in a lucrative
crematorium business.
    His other recent targets include Yokohama-based car parts
maker Yorozu Corp  7294.T , which has said it had received a
letter from Reno, urging it to abolish takeover defence scheme
and cut its cross-shareholdings.
    Shares of Kosaido finished flat at 728 yen on Thursday. The
shares are up 90 percent this year, making it the ninth best
performer among the more than 2,000 companies in the Topix index
 .TOPX .

 (Reporting by Junko Fujita; Editing by David Dolan and Neil
Fullick)
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