Hong Kong investor files injunction on NEC's JAE stake sale (updated)

NEC

26/02/2024 11:15

(Adds detail from Oasis statement to court)
    By Makiko Yamazaki
       TOKYO, Feb 26 (Reuters) - Hong Kong-based hedge fund
Oasis Management has filed an injunction to block NEC's  6701.T 
sale of its stake in its listed unit Japan Aviation Electronics
(JAE)  6807.T , saying that the sale would inflict damage on its
shareholders.
    The injunction request, filed with the Tokyo District Court
on Feb. 20 and seen by Reuters on Monday, said Oasis "believes
that the NEC board of directors neglected an opportunity to sell
JAE shares at such a high price, in breach of their fiduciary
duty owed to shareholders".
    The breach of fiduciary duty by NEC's board of directors led
to direct, quantifiable losses to NEC shareholders, Oasis said,
adding that it has been an NEC shareholder since 2020 with
shares in excess of 3 million currently.
    NEC could not be reached immediately for comment.
    Reuters reported NEC had received multiple buyout offers
from global private equity funds for JAE before agreeing to
tender much of its 51% stake to the unit at a discount via a
tender offer.
    At least three global funds have indicated to both JAE and
its parent NEC they were willing to pay substantial premiums to
buy out the maker of electronics components, sources told
Reuters.
    JAE's tender offer, which runs from Jan. 30 through Feb. 28,
sets the price at a 14% discount to the 3,040 yen closing prior
to the announcement.
    Oasis revealed in its statement to the court it made an
offer on Jan. 30 to purchase NEC's shares in JAE for 3,000 yen
per share.
    Similarly, Chicago-based investor Curi RMB Capital has
called on NEC and JAE to cancel their buyback deal and
reconsider alternative buyout offers they have received.
    It plans to seek the companies' board minutes under court
permission to evaluate their decision-making process and "pursue
appropriate recourse against the board on behalf of
shareholders", the fund said.
    
    
    

 (Reporting by Makiko Yamazaki; editing by Jason Neely)
 ((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))