Portfolio Update

RNS Number : 8791S

Nippon Active Value Fund PLC

19 July 2022

 

Rising Sun Management to make proposals to boost shareholder value at Intage Holdings AGM

London / Tokyo, 19 July 2022: Rising Sun Management ("RSM"), the investment advisor to Nippon Active Value Fund ("NAVF"), an activist, Japan-focused Investment Trust, has sent a letter to the management of Intage Holdings (Bloomberg Ticker: "4326 JP Equity"), a Japanese marketing research firm, to notify it of several proposals that will be made at Intage's forthcoming Annual General Meeting (AGM).

Paul ffolkes Davis, Chairman of RSM, listed the proposals in a letter delivered today to Mr Noriaki Ishizuka, President and Representative Director, Intage Holdings. They include:

· Replace Intage's current Point-Based Compensation trust-type stock incentive scheme with a proper Restricted Shares programme in line with METI Incentive Guidance

· Seek a clear commitment to a meaningful share buyback

· Receive assurances from Intage to greatly increase dividends

The letter from Mr ffolkes Davis can be viewed here . An earlier unpublished letter to Intage from June 22, 2022 can be viewed here .

RSM is very disappointed that the friendly MBO proposed in February 2022 has been rejected by Intage. Furthermore, RSM does not accept Intage Holdings' view that corporate value and the interests of shareholders are secured and enhanced by its growth strategy as a listed company.

Instead, RSM intends to take its dialogue with Intage in other directions in the short-term, including the proposals that will be made at the forthcoming AGM. Meanwhile, RSM has recently begun to purchase more Intage stock and will be making the appropriate filings as it continues to build its position.

NAVF, in combination with Earl 1927 LLC and Michael 1925 LLC (together the "Investor Group") holds 4.1 million common shares in Intage, making the Investor Group the company's biggest shareholder with a 10.17% stake. RSM is investment adviser to the Investor Group.

In the past, RSM has highlighted several areas of concern with how Intage is managed. They include:

· Lack of widely held stock incentives for management and employees

· An unsuitably expansionist acquisition policy lacking sufficient financial returns

· Slow progress in digitising operations and low levels of automation in the business generally

The Investor Group acts as an activist investor drawing on the RSM team's significant Japanese market knowledge and their two decades of successful engagement to generate uncorrelated returns. Many Japanese companies are under-researched, show rising balance sheet cash reserves and have questionable capital allocation policies. RSM seeks to engage with investee company management teams to promote value-enhancing corporate reorganisation and capital allocation strategies that can result in significantly improved returns for all stakeholders, including management, employees and shareholders.

-ENDS-

Media Enquiries: 

Bill McIntosh

[e-mail]

Peregrine Communications

[phone]

Alex Gorokhov

[e-mail]

Peregrine Communications

[phone]

 

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