(Bloomberg) — Deal makers and activist investors injected drama into the Japanese equity market on Wednesday, triggering sharp rallies in shares of Seven & i Holdings Co., Tokyo Gas Co., Kobayashi Pharmaceutical Co. and Kadokawa Corp.
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The gains, which came in the face of losses in the benchmark Topix, underscore just how frenetic trading has become on the Tokyo bourse this year. Within a month of setting a record high in July, the Topix tumbled into a bear market, then quickly bounced back 20% as local and global buyers returned in force.
Wednesday’s action saw convenience store operator Seven & i leap as much as 11% on a report that the founding family is looking to complete a deal to take the company private by the end of its fiscal year in February. Tokyo Gas surged 15% at one point after Elliott Investment Management said it now held a major stake in the company and may make “important proposals” to the utility.
The move by Elliott Investment is part of an uptick in purchases by activist investors who’ve got traction in taking stakes in companies and agitating for higher returns for shareholders. Kobayashi Pharma jumped as much as 6.4% after Oasis Management Co. increased its stake.
Oasis is also reported to have established a minority stake in embattled carmaker Nissan Motor Co., in which Singapore-based activist fund Effissimo Capital Management Pte has also invested. The automaker’s stock, which fell 2% Wednesday, jumped 13% on Nov. 12 after Effissimo’s stake came to light.
“This is a new characteristic for Japan’s market,” said Tomo Kinoshita, global market strategist at Invesco Asset Management Japan. “Rather than focusing on big exporters, who are at risk if the yen strengthens, more investors are becoming interested in individual stock moves, based on buyout proposals or activism.”
Deal-making news also boosted Kadokawa’s shares Wednesday, with Sony Group Corp. in talks to acquire the publisher. Kadokawa’s stock climbed as much as 19%, extending gains from Tuesday. Sony and Kadokawa are among the biggest shareholders in FromSoftware Inc., the developer behind hit games including Elden Ring.
A special-purpose company established by Seven & i’s founding family and other parties is working on a plan to conduct a takeover bid for the entire firm, and is looking to raise more than ¥8 trillion ($51.7 billion) from megabanks and US financial institutions, according to Japanese broadcaster NHK.
