What we hope Tosho to improve the shareholders’ value as a shareholder are 1) improvement of its extremely low operating profit margin through reconsidering mid-term management plan and investment plan and 2) Special dividend funded by disposal of RECRUIT shares to optimize excess net assets.
Toppan Printing Co., Ltd. (hereinafter referred to as “Toppan”) is a parent company of Tosho holding 51.42% of voting rights as of September 2018. Both are listed (parent-subsidiary listings) and both hold RECRUIT shares as joint shareholders.
We have sent letters to Toppan, too. However, Toppan seems to have no intention to supervise Tosho as a major shareholder and replied that Toppan will not meet us and discuss with us.
Summary of our letter in March 2017
It is recklessness for Tosho to invest 20 bil in new business area and the ROE target rate, 1.7% 3 years later, is extremely low. We would welcome Toppan to give guidance to Tosho as its parent company that significant shareholders’ return will reduce Tosho’s net assets and improve its capital efficiency.
Our opinion regarding Tosho’s mid-term management plan: – – Tosho should reconsider its plan which does not improve any shareholders’ value. – Tosho should return excess cash and cash equivalents to shareholders which is not needed.
We would welcome to meet and discuss with Toppan because we both are large shareholders of Tosho.
Though Toppan, parent of Tosho, invests in digital business funded by the partial “sale of RECRUIT shares”, Tosho continues to “hold RECRUIT shares” for expansion to digital business area. This appears that there is an antithetic digital strategy in the Toppan group.
Not to leave Tosho keeping RECRUIT shares and inefficient capital allocation against Toppan’s strategy, we would like directors in Toppan to supervise Tosho as parent company’s directors as this is their Duty of Care.
We would like Toppan to supervise Tosho to sell its RECRUIT shares, optimize its net assets, improve capital efficiency via special dividends and increase shareholders’ value, which is a mission for listed companies.