U.S. investment firm increases stake in JR Kyushu, urges share buyback
22/03/2019 07:00
TOKYO, March 22 (Reuters) - U.S.-based investment firm Fir
Tree Partners said on Friday it has raised its stake in Japan's
Kyushu Railway Co 9142.T to 6.1 percent and urged the railway
operator to boost its share price through buybacks and add
outside directors.
Minority shareholders, particularly foreign investment
firms, have become increasingly vocal about the management of
Japanese companies. This week four investment firms called for
the ouster of LIXIL Group's 5938.T CEO, citing corporate
governance concerns. urn:newsml:reuters.com:*:nL3N2172OU
A lack of share buybacks has long been a sore spot for
foreign investors in Japan. But this year, buybacks have hit a
record, with SoftBank Group Corp 9984.T , Sony 6758.T and
Nintendo 7974.T all among the cash-rich companies that have
bowed to pressure from investors and government to boost returns
and improve governance. urn:newsml:reuters.com:*:nL3N20D1AJ
"We are concerned by the lack of a concrete, significant
share repurchase program, which would have corrected the
inefficient capital structure and suboptimal return on equity,"
Aaron Stern, managing director at Fir Tree, said in a statement.
A Kyushu Railway spokesman declined to comment. The company
said in its medium-term plan announced last week it is
considering a stock compensation plan.
Fir Tree, which has held a stake in the railway operator,
better known as JR Kyushu, since its 2016 listing, said in
December it had increased its holding to 5.1 percent, calling
the firm "significantly undervalued".
Fir Tree also said it planned to make shareholder proposals
at the company's upcoming annual general meeting.
Shares of Kyushu Railway finished little changed at 3,660
yen on Friday.
(Reporting by Sam Nussey; Editing by David Dolan and
Muralikumar Anantharaman)
((sam.nussey@tr.com; https://twitter.com/SamNusseyRTRS;
+81364411596; Reuters Messaging:
sam.nussey.thomsonreuters.com@reuters.net))