Japan Inc kicks back against shareholder activists
By Alison Tudor
TOKYO, March 29 (Reuters) - Japanese brewer Sapporo Holdings Ltd (2501.T) and heater maker Noritz Corp. (5943.T) both persuaded shareholders to reject proposals from shareholder activists on Thursday, sending their shares lower.
Unlike in the West, where shareholder revolts are common, Japan's corporate culture has traditionally been based on consensus among management, employees and customers, with shareholders having little say in shaping policy.
More than two-thirds of Sapporo's shareholders approved the company's defence measures against hostile buyouts, giving it a way to thwart U.S. hedge fund Steel Partners' takeover attempt.
Sapporo's shares dipped 0.4 percent to 828 yen. [ID:nT145742].
Elsewhere, Noritz's meeting voted to reject a proposal by another U.S. hedge fund Fursa Alternative Strategies LLC to raise its dividend 10-fold [ID:nT158856]. Noritz shares fell 2.6 percent to 2,275 yen.
TIDE CHANGING?
Hedge funds viewed Thursday's developments as a temporary setback.
"There is clearly a developing sense in Japan now that the needs of all stakeholders must be considered more carefully," said Andy Shpiz, a managing director of Fursa.
Fursa said earlier this week that if the proposal was not accepted this time it might seek an extraordinary shareholders' meeting or launch a proxy fight next year.
Others in the industry share their outlook.
"We fully expect to see further activism, be it from private equity or activist managers," said Ed Rogers, chief executive of Rogers Investment Advisors, a hedge fund advisory firm. "There has already been one success story with Ichigo, and probably the story is not over at Sapporo."
Shareholders of steel firm Tokyo Kohtetsu Co. (5448.Q) in February blocked a takeover by Osaka Steel Co. (5449.OS), the first time in Japan shareholders have vetoed a merger approved by the companies' boards. [ID:nT160369]
Investment fund Ichigo Asset Management launched the rare proxy fight against what it saw as an unfair share swap ratio for Tokyo Kohtetsu, a small but highly profitable maker of steel sheets and H-beams.
"In general we expect more widespread acceptance of shareholder activism, but we are still not surprised if any one deal gets voted down," Rogers said.
More funds are weighing in as shareholder activism gathers momentum. Just this month British hedge fund TCI prodded Electric Power Development Co. (J-Power) (9513.T) and Chubu Electric Power Co. (9502.T) to hike their dividends.
