Asset Value Investors Limited (“AVI” or “we”) today announced that it has launched a website highlighting the exploitation of Daibiru Corporation (TYO 8806) (“Daibiru”) by its parent company Mitsui O.S.K. Lines, Ltd. (TYO 9104) (“MOL”), and is requesting that Daibiru withdraws its support for MOL’s 2,200 yen tender offer and resumes negotiations with MOL to seek a higher purchase price.
Daibiru Corporation (“Daibiru”), a subsidiary of Mitsui O.S.K. Lines, Ltd. (“MOL”) since 2004, has suffered almost two decades of governance issues due to its parent-child listing. Three of Daibiru’s four inside directors, including the President, have been appointed directly from MOL. Prior to joining Daibiru none of these inside directors had any experience in the real estate industry.
Daibiru publicly discloses a 3,000 yen per share estimated market value of its real estate. We question how the board of Daibiru could have reasonably accepted a 2,200 yen per share Tender Offer Price given this is a near 30% discount to Daibiru’s real estate value.
AVI calls on the board of Daibiru to withdraw its support for MOL’s 2,200 yen tender offer, introduce a majority of minority condition and resume negotiations with MOL to seek a higher purchase price of at least 3,000 yen.
Joe Bauernfreund, CEO of Asset Value Investors said: “Since AVI became a shareholder of Daibiru in September 2020, we have put forward various proposals to sustainably enhance Daibiru’s corporate value while considering the interests of various stakeholders. We highlighted governance issues caused by the appointment of directors and auditors from the parent company (in Japanese so-called “Amakudari”), the deteriorating morale and motivation of employees, and the lack of trust in management.
“While we welcome the decision by Daibiru and MOL to abolish the parent-child listing structure in line with our proposals, the lowly Tender Offer Price highlights the failure to protect the interests of minority shareholders.”
Please read AVI’s full presentation at www.assetvalueinvestors.com/stopexploitingdaibiru