In today’s briefing:
- Keisei Electric Railway’s Problems Are Part of a Cross-Shareholding Dissolution Process
Keisei Electric Railway’s Problems Are Part of a Cross-Shareholding Dissolution Process
- A solution for Keisei, similar to case of parent-subsidiary listing, is cashing OLC shares to raise profitability and growth potential of its business, to eliminate the distortion in market capitalization.
- There is a corporate governance issue in that OLC is accepting board members from Keisei, which has below 20% equity and does not clearly explain the synergies of the business.
- This can be viewed as part of dissolving cross-shareholdings where the company wants to obtain voting advantage without business synergies and cannot find opportunities to spend the cash it sells.
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