HK fund Oasis fails to block takeover of Japan’s Alpine

06-Dec-2018 Intellasia | Reuters | 6:00 AM Print This Post

HK fund fails to garner enough shareholder support to block sale

* Oasis considering all options, including legalCOO Meyer

* Oasis argued Alps’ share-swap offer undervalues Alpine (Adds corporate lawyer comment, background on Elliott)

* Hong Kong-based fund Oasis Management failed to block the sale of Alpine Electronics Inc to larger affiliate Alps Electric Co, highlighting the struggle activist investors face to get firms to embrace their proposals in Japan.

Alps, which already owns 40 percent in the car navigation systems maker, had made an offer to buy the Alpine shares it does not already own last year. But Oasis, Alpine’s No.2 shareholder with a 9.9 percent stake, objected, arguing the share-swap proposal undervalued the target.

“Our team fought very hard today but unfortunately we lost this game,” said Oasis Chief Operating Officer (COO) Phillip Meyer, after the Hong Kong fund’s objection to the deal was overruled at an Alpine shareholder meeting on Wednesday.

“But this is the first game of a longer series. We will fight hard in the next game too,” Meyer said, adding Oasis was considering all options, including legal, without elaborating.

He said that voting at the Alpine meeting was done through hand clapping, rather than ballots, probably because there was enough visibility on the results ahead of the meeting.

A Tokyo-based lawyer specialising in corporate governance, Stephen Givens, said voting by US activist fund Elliott Management that has a stake in the buyer and the target might have made the difference in the outcome.

Elliott started building a position in Alpine and component maker Alps in the middle of this year and last week it supported Alps’ pledge to buy back about 40 billion yen ($354 million) of its shares after the Alpine deal.

Separate filings the hedge fund made on October 10 showed it owns 9.78 percent of Alpine and 11.20 percent of Alps.

“Elliott had much more capital tied up in Alps than Alpine. Basically, Elliott as Alps shareholder was happy to acquire Alpine on the cheap,” Givens said.

How Elliott voted at the meeting is not immediately known. The US firm was not immediately available for comment.

Oasis Management had called on shareholders to reject the deal under which 0.68 shares of Alps would be swapped for each Alpine stock. The proposal indicates an offer of about 1,791 yen per Alpine stock based on Tuesday share prices, below the target firm’s close for the day of 1,819 yen.

Activist investment has been gaining momentum in Japan with prime minister Shinzo Abe advocating strengthening corporate governance, but there have been no major wins so far.

This year, six proposals from Oasis Management to internet and cryptocurrency firm GMO Internet were rejected.

Sparx Asset Management’s proposal for a three-fold hike in dividend payouts, among other requests, was also rejected by synthetic fibre maker Teikoku Sen-i. ($1 = 113.0100 yen)


Category: Japan

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