Activist Dalton Pushes for Dialogue with Fuji Media to Steer Clear of Proxy Fight
2min read The battle for control of Fuji Media Holdings (FMH) has escalated as U.S. activist investor Dalton Investments seeks direct negotiations with the Japanese media giant to avert a high-stakes proxy fight. With a 5.8% stake in fmh, Dalton has positioned itself as a catalyst for sweeping reforms following a damaging scandal involving former Fuji TV star Masahiro Nakai. The firm’s demands—ranging from board shake-ups to structural overhauls—highlight a pivotal moment for FMH, which faces a June 2025 shareholder vote on its future.
The Catalyst: Scandal, Losses, and Governance Failures
FMH’s reputation and financial health have been battered by the Nakai scandal, which saw sponsors flee after revelations of sexual assault allegations. The fallout led to a projected ¥20.1 billion net loss for fiscal 2024—the first since FMH became a holding company in 2008—and a ¥26 billion impairment charge on Fuji TV’s fixed assets. Dalton’s affiliate, Rising Sun Management (RSM), has leveraged this crisis to push for accountability.
By January 2025, RSM demanded an independent third-party committee to investigate governance failures, aligned with Japan’s legal guidelines. This escalated in April when Dalton formally proposed replacing FMH’s entire board with 12 candidates, including Yoshitaka Kitao (CEO of SBI Holdings) and James Rosenwald (Dalton co-founder). The move underscores Dalton’s strategy to dismantle FMH’s legacy leadership, symbolized by the resignation of longtime executive Hisashi Hieda, who had dominated FMH for nearly four decades.
Proxy Fight or Compromise?
Dalton’s threat to pursue a proxy fight—where it would solicit votes to unseat FMH’s board—has raised the stakes. A proxy battle could destabilize FMH further, but both sides appear open to dialogue. FMH has already implemented governance reforms, including shrinking its board from 17 to 11 members and increasing women’s representation to 36.4%. However, Dalton’s proposed slate of outsiders, including tech and finance leaders, signals a desire to modernize FMH’s decision-making.
The Financial and Strategic Crossroads
FMH’s recovery hinges on stabilizing advertiser relationships and executing structural changes. Dalton’s demands—such as spinning off its real estate division and overhauling Fuji TV’s content strategy—are aimed at boosting operational efficiency. Meanwhile, the proposed board candidates’ expertise in sectors like fintech and entertainment suggests a pivot toward innovation.
Yet FMH’s path to profitability remains uncertain. With a net loss of ¥20.1 billion, the company must balance governance reforms with cost-cutting. The June shareholder meeting will decide whether Kitao and Rosenwald’s slate gains traction, or FMH’s管理层 retains control.
Conclusion: A New Era for FMH?
Dalton’s activism reflects broader trends in Japan’s corporate governance landscape, where activist investors are pressuring firms to abandon outdated practices. FMH’s case is emblematic of this shift: a 5.8% stake has forced a media conglomerate to confront governance failures and adapt to modern demands.
If FMH accepts Dalton’s proposals, it could gain a board with cross-sector expertise, enhancing its ability to recover financially and rebuild trust. However, outright resistance risks a costly proxy fight, further alienating shareholders. With FMH’s stock price down 30% since early 2024 and its debt-to-equity ratio at 1.2x—a warning sign—compromise may be the only path to stability.
The June vote will test whether FMH can reconcile its legacy with the demands of the 21st century. For now, the stakes couldn’t be higher: the outcome could redefine not just FMH’s future, but the role of activism in Japan’s corporate governance evolution.
