Kao Corp. Shares Jump After Activist Investor Urges Action to Reach 'Full Potential'
By Kosaku Narioka
Kao Corp. shares rose sharply after Hong Kong-based activist investor Oasis Management urged the Japanese company to focus on the international growth of its cosmetics and skin-care brands, and tap its full potential
Shares closed 5.1% higher at 6,099 yen ($40.21) on Thursday after rising as much as 7.3% earlier in the day.
Oasis Management said Thursday that Kao's management hadn't done enough to fully unleash the potential of its impressive set of brands, including Curél skin-care products and Molton Brown, which encompasses fragrances, beauty and other products.
The hedge fund said Kao had the product portfolio to compete with the likes of L'Oreal and Procter & Gamble and become a global leader, but the company had not prioritized marketing or distribution to promote its products and drive revenue growth.
"Kao's iconic brands are waiting to be unleashed," Oasis Chief Investment Officer Seth Fischer said. "It's time for Kao's management to step up and tap into their full potential."
Oasis is a long-term shareholder of Kao, the hedge fund said.
In response, Kao said Thursday it is pursuing global growth by investing in its strongest brands.
Kao said that Oasis's arguments didn't fully acknowledge the active portfolio management and structural reforms the company has been executing.
The company continues to engage with Oasis and other shareholders, and welcomes fresh perspectives, it said.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
April 04, 2024 02:50 ET (06:50 GMT)
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