Activist Investor Presses Mitsui Fudosan To Offload Tokyo Disney Resort Operator Shares, Proposes $6.7B Buyback: Report

Activist investor Elliott Management has acquired a 2% stake in Mitsui Fudosan Co Ltd MTSFY, a leading Japanese developer. The investor is now reportedly pressuring the company to sell its shares in Oriental Land OLCLY.

What Happened: Elliott Management, a U.S.-based investment fund, is advocating for Mitsui Fudosan to divest its stake in Oriental Land, a key operator of the Tokyo Disney Resort, reported Nikkei Asia on Monday. The activist investor has been gradually increasing its stake in Mitsui Fudosan, positioning itself as one of the company’s top five shareholders.

Elliott Management is proposing that the proceeds from the sale of the Oriental Land shares, valued at approximately 500 billion yen, be used for a 1 trillion yen ($6.74 billion) share buyback. The activist investor believes that this move could significantly improve the developer’s return on equity, which currently stands at around 7%, compared to 10% and 9% for its competitors Nomura Real Estate Holdings Inc NMEHF and Sumitomo Realty & Development Co Ltd SURDF, respectively.

Despite Mitsui Fudosan’s historical ties with Oriental Land, Elliott Management is advocating for a complete divestment of the shares. The investor believes that this move would enable Mitsui Fudosan to improve its return on equity, which currently lags behind its competitors.

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Mitsui Fudosan, Oriental Land, and Elliott Management did not immediately respond to Benzinga's request for comment.

The Oriental Land Company fully owns and operates the Tokyo Disney Resort under a license from The Walt Disney Company.

Why It Matters: Elliott Management has been actively involved in the Japanese market. The firm previously acquired shares in SoftBank Group and advocated for a share buyback. Before Toshiba went private, Elliott also appointed a director to the tech group’s board. More recently, Elliott became a major shareholder of Dai Nippon Printing and is pushing the firm to sell off real estate holdings and cross-held shares.

These developments are in line with Elliott’s previous activities, such as its multibillion-dollar investment in Salesforce and its subsequent push for changes in the company’s strategy. The current move to influence Mitsui Fudosan’s strategy reflects Elliott’s ongoing efforts to drive change in the Japanese market.

Meanwhile, Walt Disney Co DIS will report first-quarter financial results after market close on Wednesday. Disney is expected to report first-quarter revenue of $23.685 billion according to data from Benzinga Pro. The company reported $23.512 billion in revenue in the prior year period.

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Photo by Younho Choo on Unsplash