Shares of Mitsui Fudosan It hit an all-time high on Monday after a report said US activist investment firm Elliott Management had called for the company to launch a massive stock buyback program.
Japan’s biggest property developer jumped 11.8 percent to a record 4,100 yen in early afternoon trade.
The Financial Times reported that Elite Management had asked the property group to launch one. 1 trillion yen ($6.74 billion) buyback plan.
Elliott also demanded that the company sell its $3.6 billion stake, the report said. Eastern landwhich runs Tokyo Disneyland, at both Elliott and Mitsui, citing people familiar with the matter.
“The pressures on corporate Japan are now immense – sluggish balance sheets will no longer be tolerated. Even previously untouchable elite companies – Mitsui Fudosan is the undisputed leader in both local and global Japan-led real estate development – are now being targeted.” has been made,” said Jasper. Cole, director of expertise at Monex Group, told CNBC.
Visitors in front of Cinderella Castle at Tokyo Disneyland on January 17, 2023 in Tokyo, Japan.
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Cole said Mitsui Fudosan’s ownership of Oriental Land made “little sense” and that the proceeds from the sale sought by Elliott could be used more effectively.
“Should the proceeds from the sale be used to buy back shares (as demanded by Elliott), or should Mitsui’s leadership team be more aggressive investors in future growth projects,” Cole said. Should, that is the real question.”
Shares in Oriental Land fell 2.2 percent after the news. According to LSEG data, Mitsui currently owns a 5.4 percent stake in Oriental Land, making it Oriental’s second-largest stakeholder.
As of September 2023, Oriental Land was Mitsui’s largest holding, accounting for 61.2% of its portfolio, according to LSEG data.
LSEG data shows that the company has sold 16.6 percent of its stake in Oriental Land in the past six months.
