Japan's Kirin says won't part with non-beer assets, braces for proxy fight

[TOKYO] Japan's Kirin Holdings on Tuesday stepped up its defense against an activist investor which is demanding that it sell off its non-beer assets, saying board members proposed by the fund didn't know enough about the company.

UK-based Independent Franchise Partners (IFP), which owns a 2 per cent stake in Kirin, has called on the company to concentrate on beer, shed its investments in cosmetics and drugs, and use the proceeds to buy treasury shares worth 600 billion yen (S$7.73 billion).

It has also offered a compromise, saying it would drop its demand for asset sales as long as a more independent board, including two members it has proposed, conducts a rigorous review of Kirin's business strategy.

Kirin CEO Yoshinori Isozaki said the company had interviewed the two people.

"Unfortunately, they did not know anything about Kirin," he told reporters on the sidelines of a meeting with investors, preparing for a proxy battle with IFP at a March 27 annual general meeting (AGM).

"In the end, we decided that members being proposed by the company are more appropriate to achieve our 2027 vision," he said, referring to the company's plan to use its expertise in fermentation to expand in areas such as biotechnology, food and health over the next several years.

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Kirin has said its investments in pharmaceuticals firm Kyowa Kirin Co Ltd and cosmetics company Fancl Corp were crucial given a decline in domestic beer consumption and a global shift towards healthier living.

Mr Isozaki said he did not know how many of the company's investors supported IFP.

Proxy battles are rare in Japan's consensus-driven economy, but activist investors have been gaining momentum, with Prime Minister Shinzo Abe advocating stronger corporate governance.

REUTERS