Japan Tobacco urged to sell drug unit by activist shareholder LIM (updated)

Torii Pharmaceutical Co

20/01/2023 08:34

(Updates with Japan Tobacco comment in fourth paragraph)
       TOKYO, Jan 20 (Reuters) - Japan Tobacco Inc  2914.T ,
the cigarette conglomerate one-third owned by the government, is
facing a shareholder motion to sell off its listed drug unit
Torii Pharmaceutical Co  4551.T  to boost shareholder value.
    Hong Kong-based activist fund LIM Advisors called on Japan
Tobacco, in a letter reviewed by Reuters, to divest its 53%
stake in the drug maker, known mainly for its anti-allergy
products, and launch 250 billion yen ($1.94 billion) share
buybacks with the proceeds.
    The letter also said Japan Tobacco doesn't have synergies
with the drug unit or the expertise to manage its research and
development and LIM plans to bring its proposal to the annual
general meeting of shareholders in March.
    Japan Tobacco acknowledged receiving the proposal but said
it could not elaborate on the contents of the letter. "We are
currently in the process of scrutinising the content and legal
matters," it told Reuters.
    LIM declined to comment.    
    The proposal by LIM, which holds less than 1% of Japan
Tobacco shares, comes as Japanese regulators have frowned on
so-called parent-child listings on the grounds that they can
infringe on minority shareholder rights.  urn:newsml:reuters.com:*:nL4N305399
    LIM is also pushing for corporate charter amendments to
improve governance, including a prohibition of Japan Tobacco
executives retiring to take jobs at Torii, a type of golden
parachute arrangement known as "amakudari."
    LIM, established in 1995 by investment fund veteran George
Long, has launched several governance motions in Japan in recent
years. 
    In 2021, the fund proposed that advertising company Digital
Holdings Inc  2389.T  divest a listed subsidiary, and last year
lobbied against amakudari at Nissan Motor Co  7201.T  subsidiary
Nissan Shattai Co.  7222.T 
($1 = 128.5800 yen)
 (Reporting by Rocky Swift; Additional reporting by Mariko
Katsumura and Chang-Ran Kim; Editing by Miyoung Kim and Elaine
Hardcastle)
 ((rocky.swift@thomsonreuters.com))