Tokyo Broadcasting sets June vote on activist proposal to cut crossholdings

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TOKYO (Reuters) – Shareholders of Tokyo Broadcasting System Holdings (TBS) will vote subsequent month on a proposal from a London-based investor to promote down the corporate’s crossholdings and return the ensuing proceeds to buyers.

Asset Worth Buyers, which has a 1.7 p.c stake in TBS, has proposed the broadcaster promote 40 p.c of its holdings in Tokyo Electron Ltd. However TBS has opposed this, saying it sees no dangers given the low e book worth of the shares of the semiconductor manufacturing tools maker.

The vote on the proposal is on the agenda for TBS’ annual shareholders assembly in June, in response to the corporate’s discover of convocation and a consultant of Asset Worth Buyers.

The vote comes at a time when activist funding is gaining momentum in Japan, backed by the federal government of Prime Minister Shinzo Abe that sees lively engagement between companies and shareholders as a helpful spur to financial progress.

Asset Worth Buyers (AVI) needs to significantly “persuade Japanese monetary establishments which can be shareholders of TBS to assist” the proposal, Stephen Givens, a Tokyo-based lawyer who represents the activist fund, mentioned at a media briefing.

Japanese monetary establishments have pledged to scale back their crossholdings partially to attenuate the potential influence of shares on their steadiness sheet on account of market swings.

“In the event that they don’t agree with our proposal, that contradicts with what they’ve been saying,” Givens mentioned.

Sumitomo Mitsui Banking Corp [SUMFGI.UL] and Nippon Life Insurance coverage Co [NPNLI.UL] are amongst TBS’ high 10 shareholders, proudly owning a mixed 6.14 p.c of the broadcasting firm.

TBS’ greatest cross-holding is in Tokyo Electron, shares of which account for 35 p.c of TBS’ securities portfolio, AVI’s Givens mentioned.

TBS is Tokyo Electron’s third largest shareholder, with a 4.7 p.c stake value 158 billion yen ($1.45 billion) primarily based on the share worth at Thursday’s shut.

In keeping with Japan’s governance code that got here into impact in 2015, companies are required to clarify to buyers their rationale for crossholdings.

($1 = 108.8700 yen)

Reporting by Junko Fujita; modifying by Malcolm Foster and Himani Sarkar

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