Teikoku Sen-i should boost dividend, buy shares -UK's AVI
28/01/2020 12:51
By Junko Fujita
TOKYO, Jan 28 (Reuters) - London-based Asset Value Investors
said on Tuesday it has submitted proposals to Japan's Teikoku
Sen-i Co 3302.T asking the maker of fire-fighting equipment to
boost its dividend and conduct a share buyback.
The London-based investor's bid for better returns comes
amid a government push to improve corporate governance and
follows a similar, failed effort by Japanese asset manager Sparx
Group 8739.T .
"All the reasons why Sparx submitted their proposals still
exist today," AVI CEO Joe Bauernfreund said in an interview.
"The company is undervalued and management are not doing
enough about capital efficiency to address these issues."
AVI has proposed Teikoku Sen-i boost its annual dividend to
76 yen per share from 40 yen and conduct a share buyback worth 2
billion yen ($18.23 million), or 3% of its outstanding shares.
A Teikoku Sen-i spokesman said cash is needed for the
company to expand its business to respond the government call
for disaster prevention.
Bauernfreund said the government's stance offered Teikoku
Sen-i very attractive business opportunities.
Sparx's proposals were voted down at the company's annual
shareholders meeting last year for a second time. Sparx has
since cut its stake to less than 1% from around 6%, it said.
AVI holds a 5.2% stake in Teikoku Sen-i, second to insurer
Sompo Japan Nipponkoa Insurance Co with a 5.83% stake, Refinitiv
Eikon data showed.
Other shareholders include Mizuho Bank, the banking unit of
Mizuho Financial Group 8411.T , insurer Meiji Yasuda Life
Insurance MEIJY.UL and property developer Hulic Co 3003.T .
Bauernfreund said such investors have responsibilities to
their own stakeholders to do what is good for them.
($1 = 109.7000 yen)
(Reporting by Junko Fujita; editing by Jason Neely)
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