((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Recast with comments and context in paragraphs 3-8)
US activist investor Elliott Management has taken a 5.03% stake in Tokyo Gas 9531.T, a regulatory filing showed on Tuesday, as it seeks to push Japan's largest city gas supplier to increase shareholder value.
Elliott, one of the world's most influential activist investors, said in the filing that the stake was intended for investment purposes as well as to make significant proposals based on discussions with Tokyo Gas and related companies.
The US investor views Tokyo Gas as a high-quality company, given its dominant market share in supplying gas to customers in the Tokyo metropolitan area, but its shares have been undervalued and have not had the expected results, said a person familiar with the matter.
By divesting certain assets from its large real estate portfolio that are not core to its core energy business, Tokyo Gas could improve its capital efficiency, free up capital to improve shareholder returns and boost investment in decarbonization and d “other areas of growth,” this person told Reuters.
Elliott invested in a few Japanese companies between 2020 and 2023, including Softbank and Toshiba, and ramped up its activity this year by taking stakes in three other companies ahead of Tokyo Gas, the person said.
But this is the first time Elliott has taken a stake of more than 5% in a Japanese company, according to this person.
Elliott is expected to engage in discussions with Tokyo Gas management to address the undervaluation, rather than submitting proposals to shareholders, the person added.
Tokyo Gas declined to comment on the transaction.
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