TOKYO, Nov 9 — Eneos Holdings’ bid to take its subsidiary, roadbuilder and property developer Nippo Corp, private with Goldman Sachs is meeting opposition from activist fund manager Oasis Management, which says the offer price is too low.
Hong Kong-based Oasis, which has a 4.5 per cent stake in Nippo, has taken the unusual step of going public with what it says are assurances from Eneos, Japan’s biggest refiner, and Nippo that they are open to alternative bids.
Eneos and Goldman announced in September plans to acquire the 43 per cent of Nippo Eneos does not already own. Once a complicated series of transactions is completed, Eneos will own 50.1 per cent of Nippo and Goldman the rest, with Goldman’s stake potentially later rising to 75 per cent through preference shares and options.
Oasis’s comments on other bidders were posted on the website www.protectnippo.com, which it set up after Eneos announced the takeover plan and where it has aired complaints that have long been made about majority shareholders in Japan steamrolling minority interests.
The hedge fund, which confirmed the comments, also says the offer price of ¥4,000 (RM146) for Nippo shares undervalues a company with a pile of cash, securities and real estate worth more than US$2 billion (RM8.3 billion).
Oasis says fair value is more like ¥5,600 per share, 28 per cent higher. The offer from Eneos and Goldman was at a 29 per cent premium to Nippo’s average price over a month before their announcement.
Eneos, Nikko and Goldman Sachs all declined to comment or said they could not immediately comment.
“We have spoken with several potential acquirers for the company,” the Oasis statement said, referring to Nippo.
“These buyers said they were withholding bids because of concerns that they would be perceived as hostile. Oasis has addressed these concerns with both Eneos and Nippo and clarified that they are open to alternative bids,” it said.
Nippo shares closed 1.1 per cent higher at ¥4,085, while Eneos stock dropped 0.5 per cent against a broader market decline of nearly 1 per cent.
Nippo is a 114-year old, Tokyo-based company that has turned making roads out of tar and gravel into a high-tech business, with products like an award-winning heat-reflecting pavement, according to its website.
The company plans to expand in South-east Asia, Eneos has said.
Eneos said earlier it had considered taking Nippo private and making it a fully owned unit, but that the roadbuilder did not fit easily with the company’s other segments.
The refiner is shifting away from fossil fuels, amid a global move to cut emissions and switch to renewables and other low-carbon alternatives.
Eneos, which says it will reap after-tax proceeds of ¥170 billion from the Nippo deal, said last month it will buy Japan Renewable Energy for about ¥200 billion as part of its shift.
The sellers are Goldman and Singapore’s sovereign wealth fund GIC. — Reuters
