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4/29/2029

Shareholder Activism in Asia Drives Global Total to Record High

Nikkei Asia (04/29/29) Shikata, Masayuki

Activist shareholders had their busiest year on record in 2024, with the Asia-Pacific region making up a fifth of campaigns worldwide, pushing some companies higher in the stock market and spurring others to consider going private. The worldwide tally of activist campaigns rose by six to 258, up by half from three years earlier, according to data from financial advisory Lazard. Campaigns in the Asia-Pacific tripled over that period to 57, growing about 30% on the year. Japan accounted for more than 60% of the regional total with 37, an all-time high. Activity is picking up this year as well in the run-up to general shareholders meetings in June. South Korea saw 14 campaigns, a jump of 10 from 2023. Critics say South Korean conglomerates are often controlled by minority investors that care too little about other shareholders. Australia and Hong Kong saw increases of one activist campaign each. North America made up half the global total, down from 60% in 2022 and 85% in 2014. Europe had 62 campaigns last year. The upswing in Japan has been fueled by the push for corporate governance reform since 2013 and the Tokyo Stock Exchange's 2023 call for companies to be more mindful of their share prices. The bourse has encouraged corporations to focus less on share buybacks and dividends than on steps for long-term growth, such as capital spending and the sale of unprofitable businesses. Demands for capital allocation to improve return on investment accounted for 51% of activist activity in Japan last year, significantly higher than the five-year average of 32%. U.S.-based Dalton Investments called on Japanese snack maker Ezaki Glico (2206) to amend its articles of incorporation to allow shareholder returns to be decided by investors as well, not just the board of directors. Though the proposal was rejected, it won more than 40% support, and Glico itself put forward a similar measure that was approved at the following general shareholders meeting in March. U.K.-based Palliser Capital took a stake last year in developer Tokyo Tatemono (8804) and argued that more efficient use of its capital, such as selling a cross-held stake in peer Hulic, would boost corporate value. Activist investors are increasingly seeking to lock in unrealized gains from rising land prices, reaping quick profits from property sales that can go toward dividends. Companies in the Tokyo Stock Exchange's broad Topix index had 25.88 trillion yen ($181 billion at current rates) in unrealized gains on property holdings at the end of March 2024, up about 20% from four years earlier. After buying into Mitsui Fudosan (8801) in 2024, U.S.-based Elliott Investment Management this year took a stake in Sumitomo Realty & Development (8830) and is expected to push for the developer to sell real estate holdings. This month, Dalton sent a letter to Fuji Media Holdings (4676), parent of Fuji Television, calling for it to spin off its real estate business and replace its board of directors. Activist campaigns have sparked share price rallies at some companies. Shares of elevator maker Fujitec (6406) were up roughly 80% from March 2023, when it dismissed Takakazu Uchiyama -- a member of the founding family -- as chairman under pressure from Oasis Management. The rise in demands from activists "creates a sense of tension among management, including at companies that don't receive such proposals," said Masatoshi Kikuchi, chief equity strategist at Mizuho Securities. Previously tight cross-shareholdings are being unwound, and reasonable proposals from minority investors are more likely to garner support from foreign shareholders. Some companies are going private to shield themselves from perceived pressure. Investments by buyout funds targeting mature companies in the Asia-Pacific were the highest in three years in 2024, according to Deloitte Touche Tohmatsu. Toyota Industries (6201) is considering going this route after facing pressure from investment funds last year to take steps such as dissolving a parent-child listing with a subsidiary and buying back more shares. Toyota Industries holds a 9% stake in Toyota Motor (7203). The automaker "may have proposed having [Toyota Industries] go private as a precautionary measure," said a source at an investment bank.

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1/16/2027

Dealmakers See More Retail Mergers and IPOs in 2026 After Tariffs Sidelined M&A Last Year

Reuters (01/16/27) Summerville, Abigail

Dealmakers predict an uptick in mergers and IPOs for retailers and consumer goods companies this year after punishing tariffs on imports to the United States had sidelined activity in the industry for the first half of 2025. Several national restaurant and convenience store chains are primed for IPOs, along with organic baby food company Once Upon a Farm, Hellman & Friedman-backed auto repair company Caliber Holdings, and Bob’s Discount Furniture, which is owned by Bain Capital, according to more than two dozen CEOs, M&A advisors and private equity investors who attended the ICR Conference in Orlando, Florida this week. “The number of high-quality companies that are in queue to go public in 2026 is higher than we’ve seen since 2021,” Ben Frost, Goldman Sachs' (GS) global co-head of the consumer retail group said in an interview. “The question is does that mean more will go public? If it does, private investors will see the ability to exit investments again (in a) regular way, which will help (private equity) activity.” Frost was one of the more than 3,000 attendees at the annual gathering, where executives from Walmart (WMT.O), Shake Shack (SHAK.N), and Jersey Mike’s were among presenters while bankers, lawyers and private equity investors spent much of their time brokering deals and landing clients behind the scenes. The upbeat mood was a marked shift from last spring after U.S. President Donald Trump's "Liberation Day" tariff announcements sent markets skidding and killed or stalled several consumer and retail deals. The second half of the year saw a resurgence in activity that brought with it several mega deals, including Kimberly-Clark’s (KMB.O) nearly $50 billion deal to buy Kenvue (KVUE.N), announced in November. "(Companies) are still really focused on growth and synergies. They’re looking at bigger deals than they’ve been willing to do for the last number of years. The back half of last year was the start of that,” Frost said. Kraft Heinz (KHC.O) announced in September it would split into two companies to unwind its 2015 merger, shortly after Keurig Dr Pepper (KDP.O) had agreed to buy JDE Peet’s for $18 billion with plans to split the coffee and non-coffee beverages into separate companies. In apparel, Gildan Activewear (GIL) bought Hanesbrands for $2.2 billion. Investors could also spur more deals and corporate breakups in the sectors, Audra Cohen, co-head of the consumer and retail group at law firm Sullivan & Cromwell, said in an interview at the conference. Corporate agitators have taken recent stakes in Lululemon Athletica (LULU.O) and Target (TGT.N), but aren't yet pushing for M&A. Lululemon hosted a morning yoga class and its management team met with analysts and investors at the conference. Meanwhile, private equity buyers are beating out companies for some deals, Manna Tree Partners co-founder Ellie Rubenstein told Reuters. Her firm sold its cottage cheese brand Good Culture to a larger consumer-focused firm L Catterton just last week. “A lot of these brands have gotten lost (inside big corporations) and the consumers don’t like it. You may see a lot of corporate carveouts this year,” Rubenstein told Reuters in an interview after her keynote address. She interviewed her billionaire father and Carlyle co-founder David Rubenstein, 76, on stage at the conference. The father-daughter pair contrasted their portfolios, pointing to Carlyle’s history of investing in fast food chains like McDonald's (MCD.N) and KFC Korea while Manna Tree saw big returns from investments in healthier food brands like pasture-raised egg producer Vital Farms (VITL.O) and Good Culture.

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8/21/2026

Foreign Ownership of Japan Stocks Hits New Record on AI Boom

Nikkei Asia (08/21/26) Nakada, Mayu

The share of Japanese stocks held by overseas investors hit a record for three consecutive years in fiscal 2025, with the greatest increases seen at AI-related companies and those held by activist investors. Overseas investors held 34.7% of all Japanese stocks last fiscal year, according to a shareholder distribution data by the Tokyo Stock Exchange and other exchanges. Nikkei compiled data on foreign ownership, including pension and investment funds, in companies on the TSE's Prime market with book-closings in March. Of the 1,060 for which previous fiscal year comparisons were available, 737 companies saw an increase in such holdings, while foreigners' share fell at 321 companies. Foreign investors "are increasingly picking stocks based on changes in profitability, such as return on equity, instead of scale metrics like market capitalization and liquidity," said Daisuke Uchiyama, a senior strategist at Okasan Securities. Audio equipment maker Foster Electric (TYO: 6794) recorded the biggest increase in the proportion of overseas holdings, rising 24.9 percentage points to reach 44.4%. As of the end of March, Singapore-based fund Axium Capital was Foster's largest shareholder. In June, Yasuto Monden, the fund's chief investment officer, was appointed as an outside director at the annual shareholders meeting. Amid business structure changes and rising expectations of greater shareholder returns, Foster's share price more than doubled over the year through March. The company plans to raise annual dividends to 115 yen (72 cents) this fiscal year, a 35 yen increase from the year before. While not in the top 10 in foreign ownership, digital equipment maker Wacom (TYO: 6727) saw a 13.4 percentage point increase, reaching 55.8% ownership by overseas investors. U.K. fund Asset Value Investors (AVI) increased its stake. "Changes to the Corporate Governance Code have led to more opportunities for corporate decision-making, giving activist investors more room to intervene," said Kohei Onishi, a senior investment researcher at Mitsubishi UFJ Morgan Stanley Securities. Foreign capital inflows to artificial intelligence-related stocks were also notable. Holdings by overseas investors in Furukawa Electric (TYO: 5801) rose 19.6 percentage points, putting it at second place in the ranking. The company saw sales growth, mainly for its fiber-optic cables used in AI data centers, and has forecast a 45% year-on-year rise in net profit for the fiscal year through March 2027. This year, Furukawa was added to the MSCI ACWI, a benchmark index for global equities, giving it an international spotlight. Metal company Mitsui Kinzoku's (TYO: 5706) foreign ownership rose 15 percentage points, ranking ninth. Robust demand for the company's copper foil for AI servers has led to more investors amid the AI boom, bringing in more overseas capital. Of the 33 TSE industry sector indexes, electric appliances had the most companies with increases in foreign ownership, at 68. Overseas investors hold 68.5% of shares in Kioxia Holdings (TYO: 285a). In June, the memory chip maker briefly became the top Japanese company by market capitalization. The next sector was banks, where foreign ownership increased for 64 companies. Investors bought more on expectations of improved earnings due to wider interest rate spreads following rate hikes by the Bank of Japan. Yet, the biggest increase in the sector was only 9.0 percentage points, at Ogaki Kyoritsu Bank (TYO: 8361). In fiscal 2025, net buying of Japanese stocks by overseas investors came to 10.34 trillion yen, near a 22-year high. As of the end of July, their net buying stands at over 7 trillion yen for fiscal 2026.

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8/20/2026

Northern Star Seeks Turnaround by Paying its CEO More Than BHP’s Chief

Australian Financial Review (08/20/26) Wembridge, Mark

Northern Star Resources (ASX: NST) has offered its new chief executive a compensation package that could top $18 million this financial year – surpassing the pay of BHP’s chief executive – to appease shareholders and counter a campaign by a high-profile global hedge fund. Northern Star lured Suresh Vadnagra away from Swiss trading house Glencore (LON: GLEN) to become its chief executive and deliver a new strategy for the country’s largest listed gold miner after it disappointed investors with a string of production downgrades and cost blowouts. Vadnagra’s total remuneration could reach $18.3 million this financial year – including $5.6 million of sign-on bonuses – if he steadies the ship and hits bonus targets. That would be more than the $US9.87 million ($13.86 million) outgoing BHP chief executive Mike Henry was paid in his final year. However, if Vadnagra’s sign-on bonus is stripped out of the $18 million package, then Henry would have earned more. Vadnagra’s compensation is double the amount his predecessor Stuart Tonkin received in 2025 and triple the $5.9 million the outgoing chief executive was paid last year. In the year to June 30, Northern Star revenue rose 19% to $7.6 billion, despite gold sales falling 6% to 1.54 million ounces. The average price received per ounce was a record high of $4,925, up from $3,922 the previous year. The company’s net profit grew by almost a quarter to $1.7 billion. Northern Star left its full-year dividend unchanged at 55¢ a share, choosing instead to put much of its cash into share buybacks. Costs rose 15% to $4.7 billion, which Northern Star blamed on “higher mining activity across the group at both underground and open-cut operations, inflationary factors experienced across labor and contractor rates, higher maintenance costs across the group’s processing facilities and energy costs and royalties.” The miner expected to produce between 1.5 million and 1.65 million ounces of gold during the 2027 financial year at an average cost of between $3,050 and $3,450 an ounce – an increase on the $2,698 per ounce costs this year. “We would chalk this guidance up as better than feared,” said Daniel Morgan, a mining analyst at Barrenjoey. “Northern Star has had a poor recent history of meeting guidance, so management will need to convince market this is credible.” Shares in Northern Star rose 6.52% to $24.01, part of a broader rebound in gold stocks cause by the U.S. Treasury unexpectedly ramping up buybacks of long-dated government debt. Despite operating Kalgoorlie's famed Super Pit – one of the world's richest sources of gold – some investors had soured on Northern Star after it repeatedly cut its guidance, while its $1.7 billion mill upgrade will come onstream next month after a run of cost blowouts and delays. The miner, chaired by Michael Chaney, admitted that “guidance misses over the last two years have been frustrating for shareholders.” Annabelle Sleeman, a mining analyst at Morgans, said the results were in line with expectations, as was 2027 guidance, but noted “that costs and capital expenditure are towards the bottom end, so there are potentially some increases for 2027.” The miner's market capitalization peaked at $44 billion in March, but fell $17 billion over a horror three-week period, before rebounding to $34 billion. The turmoil came to a head in June when Florida-based hedge fund Elliott Investment Management launched a campaign to agitate for sweeping boardroom changes and a potential sale of assets. Chaney, who will be replaced by his deputy Michael Ashforth after the November shareholder meeting, has hit back at Elliott's tactics, accusing the hedge fund of issuing demands “to which no responsible board would agree.” Elliott was contacted for comment.

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8/19/2026

Korea Zinc Vote Puts South Korea’s Corporate Governance Reform to the Test

Business Korea (08/19/26) Seon-young, Park

South Korea’s efforts to tackle the “Korea discount” by strengthening minority-shareholder rights and board independence are facing a high-profile test at Korea Zinc (KRX: 010130), where an unusual shareholder could play a pivotal role: the U.S. government. At Korea Zinc’s Sept. 9 extraordinary general meeting, shareholders will elect an independent director to serve on the audit committee through a separate vote. Under Korea’s “3% rule,” the voting rights of controlling shareholders are capped in such elections, giving other shareholders greater influence over the composition of the audit committee. The vote comes as Korea Zinc remains locked in a prolonged control dispute between its two major shareholder groups. A U.S.-government-backed joint venture holds a 10.6% economic interest in Korea Zinc following a strategic investment tied to the company’s $7.4 billion critical-minerals project in Tennessee. The U.S. Department of Defense is the largest voting shareholder in the joint venture. With the two major shareholder blocs closely matched, the U.S.-backed stake could prove significant in the vote. The two candidates offer contrasting backgrounds. Korea Zinc’s board has nominated Baek In-kyu, a former Deloitte Korea board chairman and accounting specialist. The Young Poong-MBK Partners alliance nominated Yoo-Kyung Park, a former executive at Dutch pension asset manager APG, where she spent 17 years overseeing responsible investment and corporate governance across the Asia-Pacific region. Park has emphasized that she would act independently of the shareholders who nominated her. “I have never met with anyone from Young Poong or MBK,” Park told local media. She said her first question after being informed of her nomination was whether she would be free to serve as a fully independent director, adding that her decisions could ultimately “disappoint MBK or Young Poong.” At APG, Park engaged with major Korean companies including Samsung Electronics (KRX: 005930), Hyundai Motor Group (KRX: 005380), and KB Financial Group (NYSE: KB) on board accountability, shareholder rights and other long-term corporate governance issues. She also served on committees involved in Korea's Stewardship Code and the National Pension Service's ESG policies. “The core of my 17 years of work at APG was independence,” Park said. “As an independent director, I will stand solely on the side of ordinary shareholders.” Park argues that an audit committee director’s role should extend beyond reviewing financial statements. Independent directors, she said, should scrutinize major corporate decisions by asking whether investments create value and whether capital is being allocated in the interests of shareholders as a whole. Her comments reflect broader criticism of Korean outside directors, who have often been accused of acting as management “rubber stamps” rather than providing effective oversight. If elected, Park said she would seek stronger communication between the board and institutional and minority shareholders, as well as a performance review of Korea Zinc’s board. At the same time, she has stressed that her criticism is not limited to Korea Zinc’s incumbent management. Park has also called on Young Poong and MBK to reflect on their role in the prolonged control dispute, warning against turning the battle into a zero-sum contest that sidelines ordinary shareholders. The U.S. government’s investment in Korea Zinc was driven primarily by strategic interests in critical minerals, supply-chain security and industrial policy, rather than Korean corporate governance. But the investment has given Washington a potentially influential position in a vote centered on board independence and minority-shareholder rights. The implications extend beyond Korea Zinc. South Korea has introduced a series of corporate-law changes aimed at strengthening the rights of ordinary shareholders and improving corporate governance. The Korea Zinc vote provides a closely watched test of how those reforms operate in practice. For investors, the outcome could offer a signal of whether Korea’s strengthened shareholder protections can translate into greater board independence and accountability. And with a U.S.-backed shareholder holding a potentially pivotal stake, the Sept. 9 vote could attract attention well beyond Korea’s corporate-governance circles.

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8/18/2026

Commentary: Settlements Are Vital for Shareholder Activists and Companies

Bloomberg Law (08/18/26) Reda, Meagan; Sluszka, Dorothy

Meagan Reda and Dorothy Sluszka, both partners in the shareholder activism practice at Olshan Frome Wolosky, say, "Shareholder activism has substantially evolved since its earliest days. Rather than monthslong public battles ending at the ballot box, activist campaigns are increasingly resolved through settlements that offer activists and companies several benefits, including more bespoke solutions to address the underlying concerns that drove the campaign. As negotiated resolutions remain the preferred outcome, the structure and implications of settlement terms have likewise evolved and become increasingly important for companies and activists alike. Companies should expect engagement much earlier in the process and remain open to creative solutions from activists and their advisers, particularly where there may be resistance to the level of change being sought. The perception of shareholder activism has shifted markedly over the past several decades. Now viewed as an established part of public company governance, activism has gained broader acceptance of its value and place in the natural ecosystem of capital markets, fostering a culture of engagement in which both company boards and activist investors benefit from a negotiated outcome rather than a protracted, heated public battle. The universal proxy card, which went into effect in August 2022, further catalyzed this shift toward negotiated resolutions by eliminating the mechanical voting obstacle that made splitting votes between management and dissident nominees onerous for shareholders. With the ability to mix and match candidates from both sides, individual directors have become more vulnerable — and election outcomes less predictable — making negotiated resolutions more attractive from the outset. The broader macroeconomic uncertainty, an unsettled regulatory backdrop, and the rising uncertainty surrounding institutional investor voting likewise have reinforced the value of constructive engagement. Companies and activists come to the negotiating table much earlier in the process, sometimes before the activist has surfaced publicly. No longer viewed simply as a mechanism to avoid a costly proxy fight, settlement agreements increasingly shape board composition, governance practices, strategic priorities, and the relationship between companies and their investors. Their terms have taken on greater significance. As settlements have increasingly become the preferred outcome, general understanding of these agreements’ objectives and structure has grown. However, specific terms can vary and are heavily negotiated among activists, companies, and their counsel. Board composition remains the central battleground. The number of seats an activist secures; whether those seats are obtained via board expansion or the removal of incumbents; and whether the new directors are mutually agreed, picked from the activist’s slate, or are representatives of the activist are all critical details that can affect other key terms of the agreement. These can include the standstill duration, which is intended to restrict the activist from engaging in certain activities for a period of time, and whether the activist must meet a minimum ownership requirement to maintain a board seat or the ability to replace directors. Standstill provisions are likewise heavily negotiated and critical to reaching a deal, with companies generally seeking longer periods of “peace” from the activist. That said, the magnitude and nature of the board change is often tied to the duration and stringency of the standstill restrictions. Accordingly, the length of the standstill period, whether there is an ownership cap, and the scope of other restricted activities (for example, no proxy solicitation, shareholder proposals, or nominations; public criticism; litigation) are the key points of friction in standstill negotiations. A settlement where the standstill expires before the company's next annual meeting typically looks very different from an agreement with a multiyear standstill, including with respect to the activist's voting obligations. Companies will often push for broader, multiyear voting commitments to lock in support and stability for the duration of the agreement. Activists typically push for more limited voting commitments to avoid obligations to blindly support any management proposal during the standstill. Agreements often carve out voting obligations for extraordinary transactions, so activists aren't bound to support a future merger, sale, or other transformative transaction they haven't had the opportunity to properly evaluate. When a settlement is reached against a backdrop of active or anticipated merger-and-acquisition activity, this voting carve-out becomes even more important as activists seek to maintain flexibility to oppose a potentially value-destructive deal. For this reason, standstill periods sometimes expire upon consummation of an extraordinary transaction. The flexibility of a negotiated resolution also allows parties to address concerns beyond reconstituting the board, opening the door for more creative solutions. To that end, we increasingly see settlements provide for the formation of new board committees focused on strategy, capital allocation, and/or operations. We also see settlements address CEO succession planning and other governance improvements, such as separating the roles of CEO and board chair or declassifying a board. Despite the benefits of settlements, not all activist campaigns lend themselves to negotiated resolutions. Campaigns targeting an underperforming CEO, contests over a potential sale of the company, or outright hostile approaches remain difficult to settle because the parties’ positions are often too far apart for a negotiated middle ground. In today’s more M&A-receptive environment, we may see more of these situations battled publicly or at the ballot box, even as settlement remains the more likely outcome overall. Boards, investors, and counsel should also expect continued evolution in the types of resolutions being reached. Alongside formal, legally binding settlement agreements, an increasing share of activist situations are being resolved informally through board, governance, and/or other changes announced via a press release — often accompanied by a supportive quote from the activist. These informal resolutions may carry less legal certainty but offer greater flexibility and speed. As both activists and companies continue to prioritize constructive engagement and efficiency over public confrontation, they're likely to become an even more common feature in the activism arena."

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8/17/2026

These Investors Just Made 60% Fom Japan’s Hidden Billions

Australian Financial Review (08/17/26) Sier, Jessica

When Sydney-based investor Jamie Halse and his Japanese business partner, Tsubasa Umezaki, talk about the hidden opportunities in corporate Japan, they often don’t mean artificial intelligence. Sometimes they just mean getting rid of the fax machine. A few years ago, Umezaki was seconded into a Japanese industrial company and handed an ambitious digital transformation project. But before he could start thinking about AI or sophisticated new software, his first step was simply shifting the business from fax to email. And even that proved too ambitious. “We couldn’t do it,” Umezaki says. The company’s customers were still using fax machines, meaning the old system had to stay. For the investing duo, that episode captures both the frustration and the opportunity in the overlooked corners of the Japanese sharemarket. At some companies, basic information such as the profit margin on a product can be difficult to pin down, while others have endured decades of falling volumes and have never been restructured, while cash accumulated over generations sits idle on balance sheets. That inertia is precisely what investment firm Senjin Capital is betting it can make money from. “We engage very constructively in a friendly manner and very politely… So it’s not a case of throwing your weight around,” says Halse. “But ultimately, if the company is not willing to change on a reasonable timeline, then you need to escalate things.” Japan’s corporate governance revolution has already created a boom for investors. Almost $U.S.100 billion ($142 billion) is now dedicated to such strategies in the country, as investors push languishing companies to deploy cash, unwind cross-shareholdings and improve returns. But as the biggest investment firms have grown, Halse believes another opportunity has opened up for the smaller players. So when global heavyweights like Elliott Investment Management and Hong Kong-based Oasis Management take on some of Japan’s corporate giants, Senjin is looking much further down the market. Halse, a former portfolio manager for Platinum Asset Management, and Umezaki aren’t poring over the financial reports of titans such as Sony (NYSE: SONY), Seven & i Holdings (TYO: 3382) or Toyota (NYSE: TM). Instead, they are scanning obscure factories in provincial Japan and buying meaningful stakes in companies worth a few hundred million dollars that most foreign investors have never heard of. “It's hard for an Australian to understand sometimes, but these companies have more cash on their balance sheet than their entire market capitalization,” Halse says during one of his regular trips to Tokyo. “It's like the business, which is generating solid cash, is just thrown in for free.” Japan's smallest public companies often trade for less than the value of the cash, securities and property sitting on the balance sheet. If management can be persuaded to put those assets to better use, Halse says shareholders don't need spectacular earnings growth to make good returns. For Halse and Umezaki, it’s all about slowly persuading management. “We start slowly, with lots of respect,” Umezaki says, before adding that his message to executives often gets boiled down to “just don’t do nothing.” Senjin’s first concentrated fund has returned more than 60% in Australian dollar terms in a little over a year, despite largely sidestepping the artificial intelligence-driven rally that has dominated the Nikkei. Its biggest position is a 9.5% stake in Iwabuchi Corp, a small manufacturer of metal fittings used to hold electricity and telecommunications cables to utility poles. It is the sort of steady, deeply unglamorous industrial business that attracts little attention from global fund managers. But the operating business wasn’t what caught Halse’s eye. “When we started buying the company, it had 100% of its market cap in cash,” he says. Iwabuchi also held investment securities worth roughly half its market value and real estate worth another 150% of its capitalization. “The business’ cash flows are only worth about a third of the company,” Halse says. “The rest of it is cash, investment securities and real estate.” Rather than launching a hostile campaign, Halse and Umezaki started quietly, touring Iwabuchi’s factory in the city of Chiba before investing. They then spent months listening to management and learning how the company operated before gradually introducing ideas about how capital could be better deployed. That softly-softly approach reflects one of the peculiarities of activism in Japan. Halse and Umezaki say management teams aren't deliberately ignoring shareholders, they have simply spent decades operating in a system where maximizing returns on capital was rarely the overriding objective. “So many Japanese companies have a financial literacy that is not on par with what you would expect in a Western company,” Umezaki says. “There have been many times when we've suggested ways to improve shareholder value and the management is really confused. They want to know why that matters.” Senjin's strategy would have been much harder to pursue a decade ago. Foreign activists have struggled for decades to gain traction in Japan, where companies were protected by dense networks of cross-shareholdings and domestic institutions that rarely challenged management. Cash-rich balance sheets, low returns on equity and sprawling collections of non-core assets could persist for years without much pressure for change. That began to shift under the late prime minister Shinzo Abe. His corporate governance reforms encouraged companies to pay greater attention to shareholders and capital, while the Tokyo Stock Exchange dramatically increased the pressure in 2023 by calling on companies trading below book value to explain how they planned to improve their valuations. Japan is now the world’s second-largest market for shareholder activism after the United States, with a record 139 shareholder proposals lodged at this year’s annual meetings. The biggest names have become a familiar presence in Japanese boardrooms. Elliott successfully pushed for change at Toyota Industries and has engaged with companies including Daikin Industries (TYO: 6367) and property giant Mitsui Fudosan (TYO: 8801), while Oasis has engaged groups including Kyocera (TYO: 6971) and cosmetics maker Kao (4452: TYO). Campaigns have also paved the way for some of Japan’s biggest private equity transactions. KKR’s $U.S.3.8 billion ($5.4 billion) acquisition of software developer Fuji Soft (TYO: 9749) followed years of pressure from Singapore-based 3D Investment Partners, while Swedish private equity giant EQT acquired elevator maker Fujitec (TYO: 6406) after Oasis waged a successful campaign to overhaul its board. Companies including medical supplier Hogy Medical (TYO: 3593) and printing-ink maker T&K Toka (TYO: 4636) have also been taken private following activist involvement that shows the increasingly close relationship between shareholder pressure and Japan's booming buyout market. But Halse's interest in Japan predates the governance revolution. He first visited the country as a 14-year-old exchange student, staying with a Japanese family he remains in contact with today. After beginning his career in tax at Deloitte, he joined Kerr Neilson's Platinum Asset Management, where he spent 13 years and rose to senior portfolio manager. Halse eventually managed about $1 billion across Platinum's Japan strategies and a global consumer fund, while leading the firm's Japan research team. The idea of a dedicated Japanese activist strategy first occurred to him while working at Platinum in 2016, as Abe's reforms created the possibility that shareholders might finally be able to unlock the enormous pools of value trapped on corporate balance sheets. He took over Platinum's Japan strategies in 2021 and pushed for a more concentrated activist approach before leaving the firm in April 2024 and co-founding Senjin with Umezaki. Tokyo-based Umezaki brings a different perspective from trying to change Japanese companies from the inside. Born and raised in London, he studied engineering at Tokyo’s Waseda University before beginning his career in Japanese equities at Barclays (NYSE: BCS). He then spent a four-year spell at KPMG, completed an MBA at London Business School and worked in Boston Consulting Group’s private equity practice. He later joined U.S.-based investor Taiyo Pacific Partners, eventually becoming a director in its Japan engagement team. There is also something more personal behind Umezaki’s enthusiasm for the strategy. Having watched Japan struggle through decades of economic stagnation, he sees improving the productivity of its companies as more than just generating investment returns. His ambition is to help Japanese companies become stronger, more efficient and more competitive – and, in the process, help revive an economy that has spent much of his lifetime largely being written off. It’s what sets Senjin apart from the stereotypical foreign raider storming into Tokyo and demanding a giant special dividend. Halse and Umezaki want management teams to invest in attractive opportunities, return excess cash when there is no investment worth pursuing and sell assets that have little strategic purpose. Sometimes the changes are sophisticated, sometimes they are painfully basic. “Japan was shut off from the world for hundreds of years,” Halse says. “It went from a feudal society to an industrialized society, and after World War II, Japan again reinvented itself. “We're just going through another period now where Japan is reinventing itself.”

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8/14/2026

Commentary: Activists Are Giving British M&A Targets a Helpful Shove

Financial Times (08/14/26) Hughes, Jennifer

Jennifer Hughes, Financial Times columnist, says, "Whenever a company attracts a takeover or an activist, it’s a backhanded compliment. The implication is that it is either undervalued or not being run well, and often both. British bosses are getting more of this uninvited attention. Merger proposals targeting UK groups are already at an eight-year peak in 2026, according to Dealogic. EasyJet (LSE: EZJ), Schroders (LSE: SDR), Tate & Lyle (LSE: TATE), Segro (LSE: SGRO), and Intertek (LSE: ITRK) are among the trophies picked up by foreign buyers. But activism is rising too: the UK was the number-three destination for cage rattling investment firms in the first half of the year, after the United States and Japan, say Barclays (NYSE: BCS) analysts. UK companies in total accounted for two-fifths of Europe’s activist campaigns, according to Alvarez & Marsal. Are cut-price stocks the main draw? The FTSE 100 trades at just 13 times forecast earnings compared with 22 times for its transatlantic counterpart, the S&P 500. Compare the UK instead with the equal-weighted S&P 500 to reduce the dominance of huge tech companies such as Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA), and the UK discount is in line with its average over the past two decades. Even among mid-caps — a sweet spot for buyers and activists alike — the FTSE 250’s discount to the U.S. Russell 2000 is only slightly below its typical gap. But where activists can potentially create value is by encouraging companies to cut along obvious dotted lines, or sell themselves at a premium to rivals that believe they can cut costs. That seems to be a growing part of the activist playbook. Calls for companies to put themselves on the block, in whole or in part, have made up a fifth of all activist demands across Europe this year, A&M reckons, compared with 8% in 2025. Sometimes, the call is loud. Think of Saba, the investment firm of hedge fund manager Weinstein, whose campaigns against Boaz undervalued UK investment trusts have toppled several boards. Others have done their agitating behind closed doors. Before UK logistics trust Segro was approached by U.S. peer Prologis (NYSE: PLD)— it accepted a £14 billion offer this month — activist Lauro Asset Management had suggested it at least spin off its data center unit. FTSE 100 testing company Intertek too, was encouraged by activists to rethink its future before private equity firm EQT swooped. A&M looked at more than 400 companies across Europe with a known activist holding of at least 1%, but where no public campaign had launched. It found that over two years, these undertook almost a third more disposals than the wider corporate population, and also a fifth fewer acquisitions. Behind the wave of UK M&A is a wave of activist deal instigators, whether they’re visible or not."

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8/12/2026

Starboard Predicted $9.1 Billion; Riot Delivered: Anthropic Lease Closes Activist Loop in Six Months

Tech Times (08/12/26) Parham, Adrian

On February 18, 2026, Starboard Value delivered a letter to Riot Platforms' (NASDAQ: RIOT) chief executive calling the company's 50-megawatt AMD lease "a proof of concept, not a transformation" and demanding that Riot pursue "highest-quality" investment-grade tenants from the frontier AI tier. Six months later, Riot announced a 20-year, $9.1 billion lease with exactly that caliber of tenant — with Bloomberg reporting on August 11 that the unnamed "leading frontier AI lab" is Anthropic, Anthropic confirmed as Riot tenant, the maker of Claude. The speed of execution has few documented parallels in the Bitcoin miner AI pivot. From investor demand to anchor lease in roughly 180 days, with a second, potentially larger deal already disclosed as a nonbinding letter of intent at Riot's 1-gigawatt Corsicana campus, the sequence reads less like a market coincidence than like a case study in activist investment delivered precisely on schedule. Starboard's February 2026 letter to Riot, addressed to CEO Jason Les and Executive Chairman Benjamin Yi, estimated that Riot's Corsicana and Rockdale campuses in Texas held $9 billion to $21 billion in potential equity value if monetized through AI and high-performance computing leases. At the time, Riot's market capitalization stood at roughly $6.3 billion and the stock traded around $15.49. The letter was direct: "time is of the essence," Starboard Managing Member Peter Feld wrote, pointing to competitors like Core Scientific and Hut 8 that had already locked up substantial AI contracts. Starboard's core argument rested on a technical observation: Riot held approximately 1.7 gigawatts of fully approved, energized power capacity across its two Texas campuses. That specific combination — approved grid interconnection plus physical infrastructure already drawing industrial-scale power — is what frontier AI labs need, and it has become dramatically harder to replicate since Starboard's letter identified the opportunity. A week before Riot's earnings release, Texas Gov. Greg Abbott issued a directive on August 3 pausing all new data center grid connections in the state until the Electric Reliability Council of Texas and the Public Utility Commission of Texas complete an audit of power and water usage, as Abbott's grid-connection pause directive made clear. The 474-gigawatt interconnection queue at that point totaled approximately 474 gigawatts of pending requests, with roughly 90% from data centers — more than five times the state's all-time peak electricity demand record of 85.5 gigawatts. Riot's Rockdale campus was not in that queue. Its interconnection is already approved and energized. That is now a structural competitive advantage that cannot be replicated by a greenfield competitor on any timeline measurable in years. The lease runs through June 2048 and covers 191 megawatts of critical IT capacity, structured as a build-to-suit Tier 3 data center at Riot's Rockdale campus, as Riot's Q2 2026 earnings release confirms. Two optional five-year extensions could raise the total potential contract value to approximately $16.1 billion. The deal is expected to generate between $7.3 billion and $8.2 billion in cumulative net operating income over the base term, or average annual NOI of $365 million to $411 million. Capacity delivery is structured in two phases: 96 megawatts is scheduled for December 2027, with the remaining 95 megawatts expected by June 2028, leveraging Rockdale's existing approved interconnection infrastructure. One critical detail absent from early media reporting: Riot has secured a $573 million interim financing facility from Morgan Stanley (NYSE: MS) to fund initial development costs while an investment-grade credit backstop is finalized. The interim loan is secured by the tenant, per Riot's own Q2 2026 disclosures. This two-step structure — bridge financing first, permanent project finance second — mirrors the financial playbook that former Bitcoin miner Hut 8 used at its Beacon Point campus, where a Baa2-rated non-recourse bond replaced construction debt once the lease was signed and Anthropic-class credit quality established. The deal makes this Riot's second signed lease at Rockdale, joining the earlier 50-megawatt AMD lease. Together, the two agreements cover 241 megawatts and are expected to generate approximately $9.8 billion in total contracted revenue. Compass Point analyst Michael Donovan described the result as "a two-tenant campus carrying $9.8 billion of contracted data center revenue." The underlying engineering logic is not complicated, but its implications are regularly understated in business reporting. A frontier AI data center is not meaningfully similar to a Bitcoin mining facility in terms of what happens inside — but it is nearly identical in terms of what it requires from the outside. Both operations run around the clock, drawing industrial-scale, continuous power from the grid. Both require large land footprints. Both need fiber connectivity and industrial cooling infrastructure. The decisive difference is the standard to which that power must be delivered. Bitcoin mining runs at effectively Tier 0 — interruptible, curtailable load that can pause when grid conditions require it. AI data centers require Tier 3 certification, which per the Uptime Institute Tier 3 standard means concurrent maintainability: redundant power and cooling paths, the ability to service any component without shutting down operations, and uptime of approximately 99.98%. A training run interrupted by a power event may corrupt hours of compute work; the contracted uptime SLA is a core part of the product an AI lab is buying. This distinction matters for understanding the engineering and capital requirements of the Riot-Anthropic deal. The existing Bitcoin mining hardware — application-specific integrated circuits (ASICs) running the SHA-256 algorithm — cannot be repurposed for GPU workloads; it will be stripped out or wound down. What transfers is the land, the substation, the grid interconnection, and the facility shell. What must be built from near-scratch at the Rockdale campus for Anthropic's use includes: liquid cooling infrastructure capable of handling rack densities in excess of 40 kilowatts (the NVIDIA (NASDAQ: NVDA) GB200 NVL72 rack design targets up to 142 kilowatts per rack, versus roughly 12 kilowatts for a typical enterprise rack); high-specification electrical distribution (switchgear, uninterruptible power supplies, generator backup); and InfiniBand or RoCE low-latency networking fabric required for multi-GPU training workloads. Riot's own Q2 earnings guidance placed total construction costs at approximately $11 million to $12 million per megawatt — implying a total buildout cost of roughly $2.2 billion for 191 megawatts — a figure confirmed by B. Riley's analyst note on the deal. That per-megawatt cost is higher than a simple retrofit of existing mining halls — because the Tier 3 specification, the cooling density, and the power redundancy requirements all start essentially from scratch. What the existing Rockdale infrastructure provides is not a shortcut to construction, but a shortcut through the most time-consuming and now-frozen part of the process: securing an approved grid interconnection in a state that has just paused all new connections. Building an equivalent greenfield campus would require years in the ERCOT interconnection queue — a queue that now numbers 474 gigawatts and is under a state-ordered audit with no clear timeline for resumption. Riot reported total Q2 2026 revenue of $174.2 million, a 14% increase from the $153.0 million posted in Q2 2025, according to Riot's Q2 2026 financial results. The data center segment generated $23.2 million of that total, comprising $4.9 million in operating lease revenue and $18.3 million in tenant fit-out services — the second quarter of meaningful data center segment revenue as AMD's initial 25-megawatt deployment converted to recurring billing. Bitcoin mining revenue fell to $113.7 million from $140.9 million in Q2 2025, driven by lower average Bitcoin prices and rising global network hash rate, partially offset by higher production volume. Engineering revenue rose to $37.3 million from $10.6 million in the year-ago quarter. The headline net loss of $237.2 million, or $0.68 per diluted share, compares to net income of $219.5 million in Q2 2025. The swing is almost entirely non-cash: depreciation and amortization of $97.8 million, impairment of property and equipment of $28.0 million, stock-based compensation of $35.6 million, and fair value adjustments on derivative power contracts of $8.4 million. Analysts largely set aside the net loss figure in favor of the contracted revenue pipeline. To fund the data center buildout, Riot has been systematically reducing its Bitcoin treasury, which fell from 15,680 BTC to 11,380 BTC during Q2. The company ended the quarter with approximately $1.2 billion in liquid assets — $548.9 million in cash and $666 million in Bitcoin at the June 30 market price of $58,527 per coin. Analyst price-target upgrades following the deal were swift. Bernstein raised its price target to $35 from $30 and maintained an Outperform rating, calling the contracts a clearer path to monetizing Riot's assets. Citi raised its target to $32 from $28 and kept a Buy rating, describing Q2 as "transformational." Piper Sandler moved to $25 from $23 with an Overweight rating. Cantor Fitzgerald raised to $30 from $23. RIOT shares gained approximately 20 to 26% in after-hours trading on August 11 after Bloomberg's identification of Anthropic, touching a high of $24.40, and held much of that gain into regular trading. The Rockdale agreement, large as it is, may not be the defining transaction in this story. Alongside the Anthropic lease, Riot disclosed on August 10 that it has signed a nonbinding letter of intent with a single prospective tenant for the entirety of its Corsicana campus. The Corsicana site holds 1 gigawatt of fully approved utility power and could support up to 756 megawatts of critical IT capacity. On the Q2 earnings call, CEO Jason Les characterized the Corsicana annual rent projection as potentially generating more than $1 billion in annual rent at full deployment — a figure that would exceed the $365 million to $411 million average annual NOI from the Anthropic deal, though negotiations remain subject to uncertainty and no binding lease has been signed. Cantor Fitzgerald's analyst noted in a research note that the Corsicana LOI represents potentially significant additional upside if Riot secures terms comparable to the Rockdale deal. Bernstein's price-target increase specifically cited both the Anthropic lease and the Corsicana LOI as key factors. Taken together, across Rockdale and Corsicana, Riot's total potential contracted and in-discussion AI data center revenue approaches or exceeds the $9 billion to $21 billion range that Starboard's February letter identified as the plausible valuation of the AI/HPC opportunity embedded in the company's Texas power assets. Starboard's February letter specifically named the January 2026 AMD lease as a "proof of concept" — important as a signal but insufficient as an execution outcome. What Starboard demanded was what Jason Les described on the August 10 earnings call as "two of the most important companies in the AI ecosystem" locked into Rockdale under combined contracts worth approximately $9.8 billion. The AMD deal itself continued to progress through Q2. Riot completed delivery of the final 20 megawatts of AMD's initial 25-megawatt deployment on time and on budget, converting it to recurring lease revenue. Construction is underway on AMD's 25-megawatt expansion, with a 10-megawatt Phase 3 targeted for November 2026 and a 15-megawatt Phase 4 for May 2027. The pattern of delivering an initial proof-of-concept lease, proving the build-out capability, and then securing a much larger anchor tenant from a leading frontier AI lab tracks exactly what Starboard's letter predicted. Riot's in-house development team — engineering and fabrication capabilities in Denver and Houston, backed by the company's capital-intensive vertical integration — was the operational infrastructure that made the delivery credible to Anthropic. The broader miner-to-AI pivot has accelerated sharply. Core Scientific now earns more than 83 cents of every revenue dollar from AI colocation. Hut 8's Beacon Point campus in Texas is fully contracted at $19.6 billion over 15 years. TeraWulf, IREN, Bitfarms, CleanSpark, and Applied Digital have each redirected capital toward AI hosting. CoinShares' 70% revenue forecast projected that AI and high-performance computing would represent approximately 70% of revenue for miners that had executed major colocation contracts by end-2026. Peer stocks rose roughly 2% — shares of IREN, Applied Digital, and TeraWulf each on August 11 — far below RIOT's 17 to 26% move — underscoring that the announcement was treated as a single-company event rather than a sector rerating. What makes Riot's position specifically unusual within this group is the combination: pre-approved power at scale in Texas during a state-ordered grid freeze, an investor campaign whose specific demands have been documented and confirmed by a definitive transaction, and a secondary campus under an LOI that could generate comparable or larger contracted revenue on its own. Whether the Rockdale campus can deliver what Anthropic needs will be tested through the build-out period extending to June 2028. The "build-to-suit Tier 3" contractual language places the construction obligation on Riot, with the Morgan Stanley $573 million bridge facility funding initial development while permanent project financing is arranged. A Tier 3 data center build-out of 191 megawatts — essentially from a stripped Bitcoin mining site to an AI-ready facility with liquid cooling, redundant power paths, high-density networking, and sub-100-millisecond switchover capability — is a substantial engineering undertaking. The December 2027 delivery target for Phase 1 is approximately 16 months away; any supply chain disruption to long-lead electrical equipment (substations, transformers, high-voltage switchgear) or delays in liquid cooling procurement could affect the timeline. That execution risk is the primary outstanding variable in what is otherwise a contract with strong financial terms. The broader implication of this deal — and of the Corsicana LOI beside it — is that the intersection of Bitcoin mining infrastructure and frontier AI compute has produced a new species of infrastructure company. Riot began as a Bitcoin miner. It may conclude its current chapter as one of the largest dedicated AI data center landlords in the United States, with a contracted revenue pipeline that Starboard's analysts could see clearly six months before the contracts were signed.

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