TOKYO (Reuters) – Japan’s Cosmo Energy Holdings said on Tuesday that it has decided to oppose a proposal from an activist shareholder group to appoint an outside director nominated by the group.
The move marked an escalated battle between Japan’s third biggest refiner and a group of investors led by prominent activist shareholder Yoshiaki Murakami amid a push by the Tokyo bourse for better capital efficiency of Japan Inc.
The investor group, City Index Eleventh, which owns a 20% stake in Cosmo, has nominated a lawyer as the outside director to encourage discussions at the board meeting as it seeks to list the energy company’s renewable power business as a measure to increase shareholder value.
The lawyer declined to meet with Cosmo’s nomination and compensation committee, however, and the energy company could not expect the nominee to engage in concrete and constructive discussions with the board members, the company said in a statement.
Cosmo also said it will submit a proposal to the annual general meeting on June 22 to adopt a poison pill, or an anti-takeover measure, against the City Index if the shareholder starts a large-scale share purchase without taking proper steps such as submitting a statement of purpose.
Cosmo introduced a poison pill in January which could be triggered only after an approval from the shareholders meeting.
But the new proposal is aimed at asking for shareholders’ approval in advance so that the company can launch the countermeasure with the unanimous approval of the board of directors, according to a spokesperson.
Poison pill is a corporate defence mechanism that is used to discourage hostile takeovers.
(Reporting by Yuka Obayashi, editing by Ed Osmond)
