An activist investor takes on Nissan
Nissan is again in a crisis. With its market value falling below $10bn, it was a matter of time before it became an activist target.
It turns out a fund managed by Effissimo, one of Japan’s most famous activists behind the campaign that took Toshiba private, has acquired a 2.5 per cent stake in Nissan.
The market was excited by the news, pushing Nissan’s share price up 20 per cent.
Analysts say some activist pressure is probably a good thing for Nissan. Japan’s third-largest carmaker shocked investors last week by announcing emergency measures to stem its losses.
The entire car industry has been under pressure from slowing growth in electric vehicles and the cut-throat competition with the cheaper offerings from Chinese rivals.
But even against those challenges, the sharp deterioration in Nissan’s financial performance has been extraordinary. Following a quarterly loss, the group is cutting 9,000 jobs, slashing production capacity by 20 per cent and selling down its stake in Mitsubishi Motors by 10 per cent.
So what does Effissimo bring to the table?
The news immediately spurred market hopes that the fund would trigger a wider shake-up in Japan’s car industry.
As its alliance with France’s Renault fades, Nissan is seeking deeper ties with Honda, and speculation is growing that Nissan’s crisis may force Honda to take a stake in its struggling rival.
But according to what Leo Lewis, the FT’s Tokyo bureau chief, is hearing, Effissimo’s real target is more likely to be Nissan Shatai, a car assembly company half-owned by the carmaker.
The fund has a near 30 per cent stake in Shatai and bankers say its stake-building in Nissan may be an attempt to put more direct pressure on the carmaker to fully acquire Shatai.
The question is whether Nissan would have the money to convert Shatai into a fully-owned subsidiary.