A planned management buyout of auto parts maker Pacific Industrial has prompted a backlash from one of its largest investors, adding pressure on the Tokyo Stock Exchange to provide more protection for minority shareholders in such deals.
The management-led offer to take the Toyota supplier private at ?2,050 per share is too low and highlights shortfalls in Japan¡¯s MBO regulations, according to Drew Edwards, portfolio manager and head of Japan equity at U.S.-based investment firm GMO.
¡°The process they¡¯re using isn¡¯t fair, and they haven¡¯t reached a fair price as a result of that,¡± said Edwards, whose fund holds around 4% of voting shares in the Japanese company. Pacific Industrial¡¯s market value is ?163 billion ($1.1 billion), and Toyota is its biggest customer, according to Bloomberg-compiled data.
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