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Fuji Media keeps real estate spinoff in play as activists circle

Fuji Media keeps real estate spinoff in play as activists circle

Japan Times10-06-2025
Fuji Media Holdings' incoming president said "all options' regarding its real estate operations remain on the table, including a possible spinoff along the lines of activist investor demands.
The Japanese entertainment group last month rejected a shareholder proposal from Dalton Investments calling for a different slate of directors as well as a spin-out of its lucrative real estate arm. But the company has yet to finalize its long-term strategy, Kenji Shimizu said in an interview Monday.
"The resulting scenario may be something along the lines of what shareholders propose, or we may pursue further growth instead,' Shimizu said. "Both scenarios are possible.'
The Japanese broadcaster — which is struggling to recover from a sexual harassment scandal — has been sparring with activist shareholders in an exchange that's become a gauge of corporate governance in Japan. Both Fuji Media's executives and Dalton are on a campaign to win shareholder support ahead of an annual general meeting on June 25.
For the near term, however, Fuji Media is reluctant to spin out the real estate arm. Operating profit in that division has grown four to five times since 2012, Shimizu said.
In contrast, Fuji Media's intellectual property assets — key to improving profitability in Fuji's core media and content segment — will require several years to monetize effectively, said Shimizu, who is now president of the group's television network. The real estate business essential as a source of investment income for the foreseeable future, he said.
Fuji Media has been struggling with declining advertising revenue alongside public condemnation of its handling of sexual misconduct allegations involving former celebrity Masahiro Nakai. Dalton has argued that Fuji should focus solely on growing its core media and content businesses.
Dalton's co-founder James Rosenwald has said that he and Fuji Media's largest shareholder, Aya Nomura, agree that spinning off the real estate unit could potentially double the conglomerate's corporate value.
Demands to split out the real estate operations will likely persist beyond the shareholder meeting later this month, Shimizu said. "Until our corporate value rises, we will continue to face such criticism,' he said.
Fuji Media is proposing 11 directors to a board that will keep Shimizu but replaces the rest of its current lineup. Dalton has proposed an alternative slate of 12 directors, including Yoshitaka Kitao, chairman and CEO of SBI Holdings.
"This board is the best we can offer now,' Shimizu said, but added that discussions are possible should any of Dalton's candidates be elected. "The task on hand is to discuss ways to enhance corporate value.'
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FOCUS: Nikkei likely to stay above 40,000 despite political uncertainty

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Nikkei likely to stay above 40,000 despite political uncertainty
Nikkei likely to stay above 40,000 despite political uncertainty

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Nikkei likely to stay above 40,000 despite political uncertainty

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Trade data show that Japan's shipments to the United States, the largest export destination for Japanese automakers, dropped 11.4 percent in value terms in June from a year earlier for the third consecutive monthly decline, contributing to a 30.8 percent plunge in its trade surplus with the country. "Stocks may be further lifted by positive incentives like more U.S. trade deals with the European Union and China, as well as economic data and earnings," possibly sending the Nikkei to the 44,000 level at one point, said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank. While many analysts believe the current level of long-term interest rates at around 1.6 percent is unlikely to be an obstacle for stocks to chase higher ground, a spike toward 2 percent may stir concerns about increased borrowing costs and dent market sentiment. Situations surrounding the bond market suggest the likelihood of the yield climbing further, as the Japan-U.S. trade deal helped ease concern about the prospects of the domestic economy and will make it easier for the Bank of Japan to further raise interest rates. The tariff deal is a "big step forward," as it reduces economic uncertainty facing Japanese companies under U.S. President Donald Trump's trade policy, BOJ Deputy Governor Shinichi Uchida said Wednesday. His remark fueled speculation that the central bank will increase the policy rate again after raising it three times since March last year to around 0.50 percent, as it shifts from a decade of unorthodox monetary easing. "Given that the tariff negotiations ended up with a desirable agreement despite expectations of tough going, the recession risk in the second half of this year has alleviated considerably," said Daiju Aoki, chief Japan economist at UBS SuMi TRUST Wealth Management Co. 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