NEW YORK--(BUSINESS WIRE)--Falcon Edge Capital, LP, a diversified global alternative asset manager, today issued the following statement regarding Kyushu Railway Company (or “JR Kyushu”) (TSE ticker 9142) in connection with its upcoming Annual General Meeting of Shareholders to be held on June 21, 2019:
As long time shareholders of Kyushu Railway Company, we have great respect for the rail and real estate business JR Kyushu management has built.
We believe that even well run companies like JR Kyushu should strive to continuously explore all possibilities and opportunities to further enhance the value for all stakeholders, including shareholders, management, employees and customers.
JR Kyushu has an opportunity to match its excellence in rail operations and real estate development with a capital allocation plan that reflects best in class practices of Japanese and global peers. We believe the proposals put forth by Fir Tree Partners will unlock significant shareholder value, importantly while remaining highly conservative.
With a buy back of 10%, JR Kyushu will begin demonstrating its commitment to shareholder value while maintaining a conservative capital structure and remaining well below domestic peer’s leverage ratios, in both railways and real estate. After careful analysis, we believe this proposal substantially enhances shareholder value while not impacting any of the capital spending requirements of the railway.
Further we are supportive of the directors proposed by Fir Tree, who we believe are regarded as highly respected and will be helpful to the board of directors in their deliberations on both operations and prudent balance sheet management.
Our comments above are in the spirit of Japan’s Stewardship Code and we feel these proposals are supportive of the Code. Specifically:
- Principle 3: "Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with an orientation towards the sustainable growth of companies."
- Principle 5: "Institutional investors should have a clear policy on voting and disclosure of voting activity. The policy on voting should not be comprised only of a mechanical checklist; it should be designed to contribute to the sustainable growth of investee companies."
In summary, we are convinced JR Kyushu is an outstanding business that is undervalued and can unlock significant shareholder value through appropriate and conservative steps that are reflected in the Fir Tree proposals.
The note above is solely Falcon Edge’s view on the shareholder proposals and is not intended and should not be construed in any way to persuade or influence the views or actions of third parties with respect to Kyushu Railway Company.
ABOUT FALCON EDGE CAPITAL
Falcon Edge Capital, LP, is a diversified global alternative asset manager founded in 2012 with offices in New York and London. For more information, please visit www.falconedgecap.com.