Daily Brief Japan: Lifenet Insurance Company, TSE Tokyo Price Index TOPIX, Misumi Group and more

In today’s briefing:

Lifenet: Oasis Management Is Now Another Major Shareholder Besides Effissimo
The Objective of an MBO Is Not to Strip Bothersome Activist Investors of Their Equity Interests
Misumi Group (9962 JP): Heads up for 3Q Results in Late January

Lifenet: Oasis Management Is Now Another Major Shareholder Besides Effissimo

Oasis Management has become a major shareholder in Lifenet in November. Together with another activist investor, Effissimo Capital (the largest shareholder), they now control >30% of the company.
Company announced some new partnerships/initiatives to drive growth but they don’t seem to be materially different from what it has been doing to turn around its declining VoNB.
Unless we can see a sustained trend of improving VoNB, it’s difficult to justify the premium valuation vs. the other more established peer.

Rather than “management with awareness of stock price,” the question is whether management is carrying out its duties toward “the goal of increasing shareholder interests,” to put it more accurately.
In determining TOB price, the question is whether independent committee was established, whether that committee actually functioned, and whether the directors performed their duties in the best interests of shareholders.
The real objective of an MBO is to restart the company for a sustainable expansion of corporate value, not to rip off the equity stake of a bothersome activist investor.

The gradual upward trend in monthly sales, which has continued through November, has further to go in our estimation.
At 22x EPS guidance for FY Mar-24, the shares are at the low end of their 5-year P/E range.
Guidance remains unchanged. 3Q results are due to be announced at the end of January

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