Hedge Fund Oasis Steps Up Pressure Over Alps Deal for Alpine

(Bloomberg) -- Oasis Management Co. stepped up its campaign against Alps Electric Co.’s proposed purchase of affiliated company Alpine Electronics Inc., urging Alps to sweeten the terms of the deal.

The Hong Kong-based hedge fund, which first criticized the takeover last year, has submitted three shareholder proposals for Alpine’s annual general meeting in June: calling on the company to appoint two independent directors that the fund suggested and to pay a special dividend of 325 yen per share ($2.96). Seth Fischer, chief investment officer of Oasis, says this is just an interim step in a longer crusade over what the fund describes as the “attempted theft” of Alpine Electronics.

“We are in the middle of our engagement for a fair deal for the minority shareholders in Alpine,” Fischer said in an interview during a visit to Tokyo. “This is simply one of the battles in this long-term battle.”

Oasis, which owns more than 9 percent of Alpine, said in October that the proposed takeover, in which Alps is offering 0.68 of a share for each share of Alpine, mistreats shareholders. The situation is even more unfair today, Fischer said, because Alpine’s profit has strongly increased while Alps is targeting an earnings decline.

A spokesman for Alps declined to comment, while a call to Alpine Electronics wasn’t answered. Alpine Electronics later issued a board of directors statement in response to Oasis’s shareholder proposals, giving five reasons why the company shouldn’t pay a special dividend, including that it needs to keep funds for developing its business globally. The board opposes Oasis’s director candidates, according to the statement.

Longer Goal

Fischer said he’s “amazed” that Alps hasn’t revised the terms of the deal. He said the fund hasn’t ruled out legal action for breach of duty over the process of the transaction. While Fischer didn’t speculate on whether shareholders -- including Alps, which owns 40 percent of Alpine -- will vote for Oasis’s shareholder proposals, he said it was possible for the proxy fight to be successful even if the proposals don’t pass. The longer goal, he said, is to ensure shareholders vote against the merger at current terms.

A strong showing “would show Alps that they’re not going to be able to merge at the current ratio,” he said. “That would be a vote against management and that would be the first big step.”

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