Elliott takes stake in Japan's Kansai Electric, FT reports
Activist investor Elliott Management has become one of the top three shareholders of Kansai Electric Power with a stake of between 4 per cent and 5 per cent, the Financial Times said on Wednesday, citing people familiar with the matter.
Kansai Electric's shares jumped 6 per cent following the report.
Elliott is urging Kansai Electric, Japan's top nuclear power operator by reactors online, to increase dividends and share buybacks by selling 150 billion yen ($1 billion) in non-core assets annually, according to the report.
Elliott has identified non-core assets at the company worth more than 2 trillion yen, including a stake in a construction firm and real estate worth more than 1 trillion yen, the FT reported.
Kansai Electric declined to comment on individual shareholders but said "we remain committed to maintaining careful communication with our shareholders".
Elliott did not immediately respond to a request for comment.
Activist investors have ramped up efforts in Japan, where companies are under pressure from regulators and the Tokyo bourse to boost shareholder returns and corporate value.
Elliott has been active in that push over more than two years, taking stakes in a range of companies including Tokyo Gas, Sumitomo Corp and Nippon Printing.
Kansai Electric said in July it had begun surveys for a new nuclear power reactor at its Mihama power station in western Japan, the first concrete step by the country to build a new nuclear power reactor since the 2011 meltdown at Tokyo Electric Power's Fukushima plant.
Apart from the energy business, Kansai has assets in IT and real estate, among others, but is targeting nuclear power as its main source of near-to-mid-term earnings growth. It plans to keep its dividend per share this fiscal year unchanged at 60 yen, despite a forecast 30 per cent drop in profits to 295 billion yen.
Elliot, which owns a little under a 5 per cent stake in Tokyo Gas, has urged that company to divest parts of its real estate portfolio to boost shareholder value.
In March, Tokyo Gas said it planned an up to 120 billion yen share buyback this fiscal year and was considering selling around 100 billion yen worth of real estate assets over the next few years.
($1 = 147.4700 yen)
