Cosmo Energy Battle: Japan’s Cosmo Energy Holdings (5021.T) is navigating choppy waters as it braces for a crucial shareholder vote on December 14. The oil refiner, ranking as Japan’s third-largest, aims to fortify its defenses against activist investors led by Yoshiaki Murakami, who are pursuing a hostile takeover. In an exclusive interview with the news channel, Cosmo’s CEO, Shigeru Yamada, expressed the company’s acknowledgment of the formidable challenges lying ahead, citing opposition from certain investors who staunchly object to any takeover defense measures.
Cosmo’s protracted battle against Murakami’s group has been marked by strategic maneuvers to thwart their advances. In a previous vote conducted in June, shareholders approved a poison pill strategy, allowing the dilution of the activist stake if they acquired additional shares without adhering to specified procedures. However, the upcoming vote carries even greater significance, focusing on obstructing further acquisitions by the activists, even if they comply with the established procedures.
Yamada disclosed that the company made a strategic decision not to adopt the “majority of minority vote” tactic used in June. This approach, while effective, could potentially divert attention from the fundamental question of determining the party best suited to enhance the company’s value. “We want to ask shareholders whose plans can boost shareholder value, ours or Murakami-san?” Yamada emphasized.
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The majority of minority votes is a practice that restricts specific shareholders from participating in voting—a mechanism that some governance experts view as a potential new weapon against shareholder activism. Yamada underscored that Murakami’s group lacks a concrete management strategy to improve Cosmo’s corporate value. While the activists argue that Cosmo’s shares are undervalued, they propose initiatives such as consolidating refineries and divesting the oil and gas development unit.
In response, Yamada reiterated the company’s commitment to its core business, emphasizing that refineries and oil and gas development would remain central until around 2030. He contended that any moves towards consolidation or divestment in these areas would undermine the interests of shareholders.
As the shareholder battle unfolds, Cosmo is strategically framing the narrative around value creation and the long-term sustainability of its core business. The upcoming vote will undoubtedly be a pivotal moment in determining the company’s trajectory in the face of persistent activist pressures.