Imagine stepping into a world where the Japanese business and finance landscape is brimming with potential and change. Warren Lichtenstein, the US financier synonymous with shaking Tokyoβs stock market in the mid-2000s, is contemplating a comeback to investing in Japan after an absence spanning more than a decade. The stage is set for an exciting revival in Japan’s corporate world, where shareholder activism has taken center stage, and companies are being urged to take unsolicited takeover bids seriously.
- Steel Partners’ founder Warren Lichtenstein, who originally founded the hedge fund in 1990 and has since transformed it into a diversified investment group, has been mulling over this decision for over a year. His multiple trips to Tokyo as part of this deliberation hint at the scale of this potential re-entry.
- Against the backdrop of a wave of shareholder activism in Japan, with major players like ValueAct and Elliott Management challenging conventional norms, a potential comeback from Lichtenstein could signify a crucial shift in the dynamics of the Japanese market. The recent proposal of an unsolicited takeover bid by Canadian retailer Couche-Tard of Seven & i, the owner of 7-Eleven, highlights this transformation.
The notion of missing out on the evolving Japanese investment scenario might just be what compels Lichtenstein to consider re-entering this arena. His past endeavors, particularly the attempts to unlock value in Japanese companies, have left an indelible mark on the landscape. The resistance faced then is not as severe today. The introduction of the corporate governance code in 2015, coupled with government initiatives to facilitate deal-making and improve board functionality, has paved the way for a more investor-friendly environment in Japan.
However, when interacting with the Financial Times during his recent visit to Tokyo in November, Lichtenstein neither confirmed establishing a Japan-focused fund nor denied contemplating a return to Japanese investments. The potential for global expansion of Steel Sports, spearheaded by Lichtenstein and baseball legend Bobby Valentine, presents an exciting avenue for inspiring youth sports and coaching programs in Japan.
At the height of his activities in Japan, Lichtenstein’s moves to unlock value at various companies stirred quite a controversy. His attempts, including the hostile 2007 takeover of Bull-Dog Sauce, left a lasting impact on the Japanese business scene. The introduction of poison-pill strategies by hundreds of Japanese companies at that time exemplified the resistance faced by foreign activist funds.
In the current landscape, where the governance code has mandated better responsiveness to shareholders and changes to takeover guidelines are on the horizon, Lichtenstein’s potential return could be met with a much warmer reception. Approximately 16% of companies in the Prime section of the Tokyo Stock Exchange now boast boards with a majority of independent directors, making them more open to serious takeover bids, even if unsolicited.
In summary, the prospect of Warren Lichtenstein’s return to investing in Japan represents a significant development in the evolving Japanese corporate world. This potential re-entry, against the backdrop of shareholder activism, governance reform, and a changing business landscape, symbolizes a new era of opportunities in Japan’s financial markets.
Leave feedback about this