Elliott calls on Mitsui Osk to buy back 300B of shares: Nikkei

Elliott Investment Management has taken a "significant" stake in Mitsui OSK Lines (9104.T), according to sources, and is urging the Japanese shipping company to enhance shareholder returns and capital efficiency. The hedge fund has called for a review of Mitsui OSK's real estate portfolio and a potential relisting of its wholly owned subsidiary, Daibiru, which was delisted in 2022. Elliott also believes the market undervalues Mitsui OSK's fleet of over 900 vessels, including bulk carriers, tankers, and ferries.

Mitsui OSK, which aims to raise its price-to-book ratio from 0.67 to 1 or higher, has emphasized balancing shareholder returns with growth investments. The Tokyo bourse has intensified pressure on firms trading below book value to optimize capital use, a challenge for Mitsui OSK amid the cyclical nature of the shipping industry. The company is set to unveil its latest management plan at month-end.

Elliott's involvement reflects broader activist investor interest in Japan, driven by regulatory and market demands for governance reforms. Mitsui OSK's shares surged nearly 11% following reports of Elliott's investment, outperforming the Nikkei 225 index. The hedge fund, known for its aggressive activism, has previously targeted firms such as Toyota and Tokyo Gas.

Shipping firms, including Mitsui OSK, face additional challenges from geopolitical risks, such as recent minor damage to one of its container ships in the Gulf. Mitsui OSK has not publicly commented on Elliott's proposals, while Elliott declined to specify the size of its stake.

This development underscores ongoing efforts by Japanese companies to address undervaluation concerns and align with evolving investor expectations.