Oasis Response to Hokuetsu’s Announcement on Reducing Daio Paper Stake (Securities Code: 3865 JT)
19 Mayo 2024 - 6:00PM
Business Wire
www.HokuetsuCorpGov.com
Oasis Management Company Ltd. (“Oasis”) is the manager to funds
that beneficially own approximately 18% of Japanese paper
manufacturer Hokuetsu Corporation (3865 JT) (“Hokuetsu” or the
“Company”). Oasis has adopted the Japan FSA’s “Principles of
Responsible Institutional Investors” (a/k/a the Japan Stewardship
Code) and in line with those principles, Oasis monitors and engages
with its investee companies.
Oasis has been engaging with Hokuetsu since 2019 in efforts to
help improve the Company’s corporate governance and corporate
value. Unfortunately, Hokuetsu’s CEO has been the barrier to a
productive engagement. Accordingly, Oasis has submitted a
shareholder proposal to dismiss Mr. Kishimoto and the four
incumbent “independent” directors and nominating five new truly
independent directors. We firmly believe that our proposals for
change at the Board level will lay a crucial foundation for
Hokuetsu on which it can enhance its corporate governance and
embark on a trajectory of improving corporate value for the benefit
of all stakeholders.
Hokuetsu’s recent May 15 announcement is a transparent attempt
by President Kishimoto to yet again overpromise and underdeliver.
Hokuetsu claims it will achieve JPY 3 billion in synergies in
FY27/3 with Daio Paper, while simultaneously reducing its Daio
Paper stake. We have never seen a case where a company announces a
strategic alliance while simultaneously divesting its
cross-shareholdings of that strategic partner. Moreover, there were
no numerical details provided on where the synergies are to be
gained from or by when, nor did they disclose to whom and at what
price they plan to sell their Daio shares.
Back in 2012, when Hokuetsu originally bought the Daio stake
under Mr. Kishimoto’s leadership, the Company made similar
promises. It has now been over 12 years and we have not seen
any progress on synergies or
partnership, including the failed alliance with Daio Paper that
abruptly ended in April 2017. Hokuetsu’s stock price is down -8.4%
since Hokuetsu’s May 15 announcement, which we believe demonstrates
Mr. Kishimoto’s poor management, and that shareholders will not be
fooled again.
We seek progress for all Hokuetsu stakeholders, and aim to
achieve real synergies, real accountability, and improved
governance at Hokuetsu. To achieve this, we urge shareholders to
vote FOR Oasis’s proposals to dismiss Mr.
Kishimoto and the four incumbent “independent” directors and
approve the slate Oasis has proposed of five truly
independent, skilled, and diverse new directors. Daio Paper’s stock
price is now down over -50% from when we first approached Hokuetsu
to sell its Daio Paper shares, and we believe now may not be the
right time to sell. The new management team including the five new
independent directors we hope will be elected can decide on the
appropriate timing and price to sell Hokuetsu’s shares of Daio
Paper, or to proceed with a potential merger.
To learn more about Oasis’s proposals, please visit
www.hokuetsucorpgov.com. We welcome all stakeholders to contact
Oasis at info@hokuetsucorpgov.com to help improve Hokuetsu’s Corp
Gov through accountability now.
Oasis Management Company Ltd. manages private investment
funds focused on opportunities in a wide array of asset classes
across countries and sectors. Oasis was founded in 2002 by Seth H.
Fischer, who leads the firm as its Chief Investment Officer.
More information about Oasis is available at
https://oasiscm.com. Oasis has adopted the Japan
FSA’s “Principles of Responsible Institutional Investors” (a/k/a
Japan Stewardship Code) and in line with those principles, Oasis
monitors and engages with our investee companies.
The information contained in this press release (referred to
as the "Document") is an information resource for shareholders in
Hokuetsu offered by Oasis, the investment manager to funds that are
shareholders of Hokuetsu (the "Oasis Funds"). The Document is not
intended to solicit or seek shareholders' agreements to jointly
exercise any voting rights with Oasis. Shareholders that have an
agreement to jointly exercise their voting rights are regarded as
Joint Holders under the Japanese large shareholding disclosure
rules and they must file notification of their aggregate share
ownership with the relevant Japanese authority for public
disclosure under the Financial Instruments and Exchange Act. Oasis
does not intend to be subjected to such notification
requirement.
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version on businesswire.com: https://www.businesswire.com/news/home/20240519272072/en/
For all inquiries, please contact: Taylor Hall
media@oasiscm.com