Elliott Takes Aim at Mitsui OSK Lines With Call to Unlock Value

Elliott Investment Management has taken a significant stake in Japanese shipping giant Mitsui OSK Lines, calling for measures to boost shareholder returns and unlock value from the company’s asset base.

The US activist investor said in a statement late Tuesday that it views Mitsui OSK as “materially undervalued” and intends to engage with management as the company prepares its next medium-term plan. Manhattan-based Elliott has been growing its footprint in Japan, targeting companies across sectors including utilities, real estate and industrials.

Among Elliott’s proposals is a review of Mitsui OSK’s real estate portfolio, sources told Reuters. This would include a potential relisting of the group’s Daibiru property arm, which was taken private in 2022.

“We are a significant investor in Mitsui OSK because we see an opportunity to work constructively with the company to ensure its upcoming medium-term management plan is appropriately ambitious, to reframe how it is viewed by the market and to deliver the premium valuation it deserves,” said the firm led by Paul Singer.

Activists Pressure Japan Inc

Elliott didn’t reveal the precise size of its stake. Disclosure requirements for large shareholders kick in at the 5 percent threshold, according to Japan’s Financial Services Agency.

Elliott’s recent campaigns have included pushing for improved returns at Sumitomo Realty & Development and Tokyo Gas, as well as involvement in transactions linked to Toyota Group entities.

Last June, Elliott outlined four key areas of concern at Sumitomo Realty — poor shareholder returns, excessive cross-shareholdings, declining capital efficiency and subpar governance — and urged the developer to implement “tangible reforms” like increasing its shareholder payout and setting a credible return target.

A plan published in response by Sumitomo Realty in August lacked ambition and urgency, Elliott said in a release.

Previously, Elliott had purchased a stake in Tokyo Gas in 2024. After the US firm urged the city gas utility to boost value by selling some parts of its extensive real estate portfolio, Tokyo Gas last January earmarked assets for sale to fund growth investments.

Elliott’s latest drive takes place amid a wave of investor activism in Japan, where broadcasting giant Fuji Media Holdings said last month that it would consider the introduction of outside capital into its real estate business, bowing to pressure from activist shareholders seeking higher returns.

Fuji Media’s $3.9 billion property arm comprises developer Sankei Building, hospitality operator Granvista Hotels & Resorts and nine other subsidiaries. US-based Dalton Investments has been pressuring the media giant since early last year to spin off its real estate, unwind cross-shareholdings and reform its corporate governance after a sexual harassment scandal.

Overseas Empire

Elliott’s focus on Mitsui OSK’s property assets echoes a broader theme in Japan, where conglomerates are increasingly under pressure to monetise real estate holdings accumulated over decades.

Osaka-based Daibiru, which owns and manages office buildings in central Tokyo and other cities — including the 135 King Street tower in Sydney — has been a key part of that strategy since Mitsui OSK acquired full control of the company and delisted it four years ago.

In 2024, Mitsui OSK committed a respective S$130 million and S$131 million (then $97 million and $98 million) to CapitaLand SEA Logistics Fund and CapitaLand India Growth Fund 2, making the latter investment via Daibiru.

The infusions to the Singaporean giant’s private vehicles helped fund development of Thailand’s largest standalone warehouse and gave Daibiru a 25 percent effective stake in International Tech Park Chennai, Radial Road.

Also in 2024, Mitsui OSK Lines provided backing for Hankyu Hanshin Properties’ buy, alongside an unnamed Malaysian fund, of an Australian logistics portfolio held by a joint venture of ESR and the Abu Dhabi Investment Authority.

Earlier this year, Mitsui OSK disclosed that it was investing in Omega 1 Singapore, an industrial project in the Jurong area, through a CapitaLand vehicle. The notice came the same day that CapitaLand revealed plans to develop the automated logistics facility under the CapitaLand SEA Logistics Fund.