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12/17/2025

'Final Fantasy' Maker and Activist Investor Seek New Path Forward

Bloomberg (12/17/25) Mochizuki, Takashi

3D Investment Partners has been nudging shares of Square Enix Holdings Co. (9684) both lower and higher over the past week. First, the Singapore-based outfit incited investor frustration for not being radical enough in suggesting reforms to revive the struggling games maker. Then, it reignited hopes that such proposals may be imminent. The activist group last week published a detailed 112-page letter criticizing Square Enix President Takashi Kiryu and urging fellow shareholders to support its campaign for change. It wasn’t well received, as Square Enix shares fell more than 9% over the course of the week. The stock recouped some of those losses this week after 3D disclosed it had increased its stake and suggested it would submit “important” proposals to management. 3D’s involvement first became public in April, prompting hopeful speculation about its intentions. The fund has a track record of pressuring companies such as Sapporo Holdings Ltd. to take aggressive steps to boost shareholder value. Its stake-building also followed news that Square Enix Honorary Chairman Yasuhiro Fukushima sold his Tokyo mansion, raising questions about whether he — the founder and largest shareholder with just under 20% — might eventually divest his holdings. “There was a lot of hope baked into the stock,” Bernstein analyst Robin Zhu said. And that’s why the initial set of ideas from 3D for Square Enix seemed to be greeted as something of a letdown. So far, 3D’s public actions toward the Final Fantasy maker have been limited to accumulating shares and authoring a letter that largely reiterates long-acknowledged challenges. The fund has not yet offered particularly bold actions such as major asset sales. “When 3D first came in, investors hoped they might push for asset sales or some hidden way to unlock value — even a full sale of Square Enix with a takeover premium,” said UBS Securities analyst Yijia Zhai. “But their proposal does not seem to be able to surprise investors. With no additional value in sight, event-driven investors are now pulling back.” As the 3D letter notes, Square Enix has struggled for years to deliver blockbuster hits — a problem blamed on poor management of the development pipeline, overreliance on Sony Group Corp.’s PlayStation at a time when Nintendo Co.’s Switch platforms have boomed, and an excess of low-quality releases that alienated fans. A high cost structure to game production also weighed on profitability. But these issues largely accumulated under former President Yosuke Matsuda, not Kiryu. Since taking the helm in 2023, Kiryu has led sweeping restructuring efforts: canceling unprofitable mobile titles, streamlining development processes, revamping internal teams and shuttering overseas studios. Under its three-year plan through March 2027, Square Enix is focused on downsizing, with major big-budget titles expected in the following period. Soichiro Fukuda, senior analyst at Tokai Tokyo Intelligence Laboratory, said the company is moving in the right direction. “The company is already doing quite a lot itself,” he said. “It’s just a case of waiting now.” A key risk is that Square Enix has acknowledged these reforms will take time — and in that period, its prominence could fade as an onslaught of competition hits game stores each day and competes for finite attention. Developers globally say it’s increasingly difficult for new games to stand out, as players remain committed to a limited set of long-running live-service titles. Square Enix doesn’t have a good answer for how it’ll maintain its brand recognition without commanding such a title. The company’s flagship role-playing game franchises, Final Fantasy and Dragon Quest, remain iconic. But recent entries have leaned heavily on remakes, and their core fans are aging. Serkan Toto, chief executive officer of a game industry consultancy, said both game brands may be past their peak. “Large parts of the gamer population in Japan and elsewhere simply have lost interest in Dragon Quest and Final Fantasy over time,” Toto said. “Both lost a lot of their thunder in the last 10 to 15 years, and Square Enix seems out of touch with the mass market that is now jumping on Chinese-made RPGs instead.” As UBS’s Zhai says, the real test will be whether Square Enix can develop fresh, big-budget franchises capable of supporting the business for years to come. Debating that now may be premature, but 3D’s intervention is bringing the issue to the fore. Kiryu can still count on fan loyalty built up over decades and a measure of patience from investors who’ve waited on the sidelines for years. The challenge now is to deliver — while that goodwill remains.

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12/17/2025

Elliott Management Trims Stake in Southwest Airlines, Expresses Confidence in Profitability

Seeking Alpha (12/17/25) Thielen, Amy

Elliott Investment Management has trimmed its stake in Southwest Airlines (LUV) to 51,128,500 shares, representing a 9.9% stake, below the 10% threshold necessary to call for a special shareholder meeting. In a filing with the U.S. Securities and Exchange Commission, Elliott Investment Management said that while it reduced its holdings in Southwest Airlines, it plans to remain a “significant shareholder based on its confidence that [Southwest’s] execution of ongoing strategic initiatives will translate into greater profitability, accretive capital-allocation opportunities and shareholder value creation.” Elliott began accumulating a stake in the carrier last year in an effort to force changes that would restore shareholder value by reshuffling its board of directors and replace CEO Bob Jordan. The investment fund requested a special shareholder meeting last December in what appeared to be the first salvo in a proxy fight with the airline. To placate Elliott, Southwest made operational changes, refreshed its board with six new directors, increased the amount Elliott can acquire to 19.9% from 14.9%, and announced the accelerated retirement of Executive Chairman Gary Kelly. In return, Bob Jordan would remain as CEO and Elliott would abandon any efforts to initiate a proxy fight. After a year of cost-cutting and conducting what the carrier considered its “most significant transformation in the airlines' history,” Southwest reported better-than-expected results for the third quarter and set upbeat guidance for the current quarter. Accordingly, Southwest shares have gained 30% since October and recently enjoyed an eleven-day winning streak, culminating in a 3 ½ year high for the stock.

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12/16/2025

Korea Zinc Shareholders Ask Court to Block Share Sale in $7.4 Billion US Project

Reuters (12/16/25) Kim, Heejin; Jin, Hyunjoo

Two major Korea Zinc (000670) shareholders asked a court on Tuesday to block the company's plan to sell new shares - part of a scheme to help fund a $7.4 billion U.S. smelter which would be built in partnership with the U.S. government. The filing for an injunction with the Seoul Central District Court threw doubt over the project and sent shares in the world's largest zinc smelting company plummeting 14%. A day earlier, Korea Zinc unveiled a plan to build a U.S.-based refinery for zinc and other critical minerals - an effort that would help the United States cut reliance on China for key materials used in manufacturing electronics and weapons. The shareholders, Young Poong (010130) and private equity firm MBK Partners, said on Tuesday they were not opposed to the construction of a U.S. smelter per se. But they object to the proposed issuance of new shares worth $1.9 billion to a joint venture backed by the U.S. government and unnamed U.S.-based strategic investors that would give the investors 10% of Korea Zinc. That, in turn, would dilute their holdings and help Korea Zinc's chairman cement control of the firm. The legal action deepens a bitter feud between the founding families of Young Poong over control of Korea Zinc. Young Poong owns roughly 37% of Korea Zinc and MBK has about 9%, while the company's Chairman Yun B. Choi and his backers have a smaller 32%. But the two allies only have 4 board members on the 15-member board between them compared to the 11 backing Choi. Young Poong and MBK, which have been trying to wrest control of the company from current management, argue that the share issue plan severely infringes on shareholder rights and undermines governance standards. The company did not provide sufficient time and information to its board members before a meeting on Monday that approved the plan, they added. "Governance risks were always there and now the situation is worsening," said Kim Yong-jin, a management professor at Sogang University. Korea Zinc said in a statement that it gave board members sufficient time and documents to review the plan, and that the project was in accordance with laws and regulations. The refinery is needed "to establish a critical minerals supply chain in line with U.S. government policy and to strengthen global competitiveness," it said. The partnership with the U.S. government helps current management justify their case for maintaining control, as they can argue the plan supports the U.S.-South Korea alliance and broader economic security, analysts at Seoul-based Shinhan Securities said in a client note on Tuesday. U.S. Commerce Secretary Howard Lutnick on Monday hailed Korea Zinc's plan as a "big win for America," saying the essential minerals will power key technologies such as defense systems, semiconductors, artificial intelligence and data centers.

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12/16/2025

New Trump Order Reining in Proxy Advisers Could Weaken Shareholder Rights

Reuters (12/16/25) Kerber, Ross

A new White House order aiming to rein in proxy advisory firms marks a major step in a broader Republican effort to weaken the role of investors and put more power in the hands of CEOs, corporate governance analysts and attorneys said. U.S. President Donald Trump told the U.S. Securities and Exchange Commission (SEC) and other agencies last week to increase oversight of proxy advisers Institutional Shareholder Services and Glass, Lewis & Co, which help mutual fund companies and other big institutional investors decide how to vote at corporate elections. Their clients hold significant positions in some of the biggest Fortune 500 companies in the world, making their advice influential. Trump's order said the proxy firms often use their power "to advance and prioritize radical politically-motivated agendas," including supporting environmental and social issues at the expense of shareholder returns. The directive goes to the heart of a debate that has split U.S. and European shareholders: how much should issues like climate change or workforce diversity factor into investment decisions. "This is about a lot more than fiduciary responsibility. This is geopolitical warfare through financial markets," said Sarah Wilson, CEO of British proxy adviser Minerva Analytics. She said Minerva's clients, largely based in the European Union and United Kingdom, want to keep their Russell 3000 holdings but worry Trump's order and similar actions by Republican-led states could interfere with their investment process. "Our clients aren't rabid socialists at the gates, they want good returns over time that are well risk-adjusted," Wilson said. Trump's order, among other things, directs the SEC to consider "revising or rescinding all rules" related to shareholder proposals, worrying investor activists one of their key tools to pressure companies could be taken away. Shareholders often exercise their opinions by backing proxy measures calling for things like limits on CEO pay or on voting for board directors, seen as increasing accountability. If the agencies follow through with Trump's order, it could serve to reduce shareholder power by making it harder for investors to pressure companies through proxy campaigns. Sanford Lewis, an attorney who represents shareholder activists, said the order is based on the premise that issues like diversity or the environment don't relate to financial performance, even though many investors and proxy advisers do think strong ESG policies improve a company's long-term value. The White House, Lewis said, is "trying to push their view onto investors." U.S. business trade groups meanwhile praised the order, saying it would take politics out of business decisions and protect returns. Charles Crain, managing vice president of policy for the National Association of Manufacturers, said Trump's planned efforts will guard against the firms' outsized influence and address issues including what he called "investment advisers' over-reliance on these under-regulated entities." Michael Littenberg, an attorney for Ropes & Gray, said the order should be seen as part of a broader debate over how to balance robust markets and investor protections. “We are in the midst of what is likely to be a once-in-a-generation governance recalibration," he said. A White House official, speaking on condition of anonymity, said the order is meant to strengthen investors' focus on maximizing returns. "The only thing this executive order interferes with is the monopolistic practices of foreign-owned proxy advisors that seek to advance radical politically-motivated agendas," the official said. Germany's Deutsche Boerse bought most of top proxy adviser Institutional Shareholder Services in 2020. Glass Lewis is owned by Canadian private equity firm Peloton Capital and its chairman Stephen Smith. Since taking office earlier this year, Trump and his appointees have moved to diminish shareholder influence on several fronts, including giving boards more control of annual meeting ballots and putting new filing requirements on big index fund managers BlackRock (BLK) and Vanguard if they pressure management. Proxy advisers have been targets of top CEOs like Elon Musk and Jamie Dimon, and drawn support from various Democratic officials and pension fund leaders. In the face of a broader backlash to their support of ESG investing, the firms have taken steps like supporting fewer environmental shareholder resolutions. Those shifts haven't spared them ongoing scrutiny in Washington even before Trump's order, and from Republican-led states, although both firms have had some legal success like beating back a new Texas law that would have restricted their ability to offer ESG advice. In that sense, Trump's order continues the pressure to diminish shareholder engagement, said Dan Crowley, partner at law firm K&L Gates in Washington. The order "perpetuates the fiction that investors care either about ESG considerations on the one hand or about pecuniary returns on the other, when the reality is that most large investors care about ESG considerations precisely because of the potential impact they have on long-term, risk-adjusted returns."

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12/16/2025

AI-assisted Hiring Will Drive Indeed’s Growth, Recruit CEO Says

Bloomberg (12/16/25) Stevenson, Reed; Yoshida, Koh

Companies embracing artificial intelligence to recruit and hire people won’t threaten Indeed.com’s business model, as some investors fear, but rather help drive profit and sales growth at the No. 1 job-search portal, its chief executive officer said. Hisayuki “Deko” Idekoba, who leads Indeed and its parent, Tokyo-based Recruit Holdings Co. (6098), said the business is using AI to help companies optimize their talent-acquisition approach based on the pool of candidates, number of applicants per job and other factors, while using the flow of data to set compensation levels or adjust job qualifications. “We’re gradually starting to deploy solutions such as AI agents to customers,” Idekoba said in an interview in Tokyo. For Recruit, the shift reflects a broader transformation in how employers find and evaluate talent, as AI reshapes recruitment worldwide. Automated tools are speeding up candidate screening, cutting hiring costs, and helping businesses respond to labor shortages and changing skill demands. As a result, Recruit should benefit as more companies embrace AI tools and tap into the group’s vast job and employer listings, according to Idekoba. In addition to Indeed and employee-review portal Glassdoor, Recruit operates job advertising and staffing services across the world as well as portals that connect consumers with businesses large and small. In the latest quarter through September, Recruit reported a 13% jump in operating profit on sales of ¥915 billion ($5.9 billion) from a year earlier. That helped to drive a 16% rally in the stock since the results were released on Nov. 6. Still, the shares remain down around 24% this year, even after Recruit embarked on a new plan to buy back as much as ¥250 billion worth of its own stock through April 2026. The company had been under pressure from ValueAct Capital over the past few years to boost its value, and conducted buybacks worth more than ¥1.2 trillion. That helped to more than double Recruit’s shares over 2023 and 2024.

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12/15/2025

Young Poong, MBK Challenge Korea Zinc’s $6.8 Billion US Smelter Plan

Korea Times (12/15/25) Ji-hye, Jun

Young Poong (000670) and MBK Partners criticized Korea Zinc’s (010130) push to build a smelter in the United States, saying on Monday that the plan runs counter to commercial logic and is designed to defend company Chairman Choi Yun-beom’s management control. The Young Poong-MBK alliance is the largest shareholder of Korea Zinc and has been challenging Choi’s managerial control since launching a tender offer on Sept. 13, 2024. They issued the objections after reports that the world’s largest zinc smelter plans to construct a strategic minerals smelter worth 10 trillion won ($6.8 billion) in the southeastern United States, with the U.S. government and corporations expected to contribute around 2 trillion won. The facility is slated to serve as a U.S.-based production hub for key strategic minerals, including antimony and germanium, which Korea Zinc currently manufactures domestically. Korea Zinc’s management convened an emergency board meeting and later approved a third-party allotment capital increase to fund the construction of a U.S. smelter. “As Korea Zinc’s largest shareholder, directors appointed by Young Poong and MBK Partners express deep regret that they were entirely excluded from any meaningful prior briefing or discussion on a matter of such far-reaching importance to the company’s future,” a Young Poong official said. “This represents a severe breakdown in corporate governance and a serious procedural violation.” The alliance stated its strong objection to the board’s approval, warning that the decisions could erode shareholder value and weaken the company’s financial soundness. It argued that the Korea Zinc board, dominated by directors aligned with Choi, rushed through major overseas investment- and governance-related resolutions amid the ongoing battle for management control, without sufficient scrutiny or proper communication with stakeholders. “We will promptly seek a court injunction to halt the issuance of new shares, in order to safeguard Korea Zinc’s long-term viability and shareholder interests,” the Young Poong official added. The official argued that the initiative, framed as a response to geopolitical tensions and the U.S.-China rivalry, in reality sacrifices Korea’s strategic national asset — its “zinc sovereignty” — to protect Choi’s personal control of the company, rather than reflecting genuine business necessity. He also said claims that the U.S. government is “investing” in Korea Zinc are fundamentally misleading. “In a normal commercial structure, an investor supporting the construction of a new smelter would invest directly in the project entity,” he said. “Instead, as reported, the proposed transaction would take the unprecedented step of having a U.S.-backed joint venture acquire newly issued shares of Korea Zinc through a third-party allotment.” The official added that channeling funds into Korea Zinc and granting voting rights to a foreign investor shows the move is aimed not at financing the project but at forming a friendly voting bloc to shore up Choi’s control. He added that the plan raises serious fiduciary duty concerns under Korea’s revised Commercial Act, noting that the hurried dilution of shareholders — despite the project’s long timeline — casts doubt on its true intent. Korea Zinc’s Onsan Refinery in Ulsan operates an integrated hydrometallurgical and pyrometallurgical process to produce zinc as well as strategic minerals such as antimony and germanium. The proposed U.S. facility is expected to use a similar integrated process and function as a hub for supplying critical minerals and advanced industrial materials. Young Poong and MBK Partners warned, however, that building a U.S. “twin” of the Onsan plant could hollow out Korea’s domestic smelting industry, replace exports with local output and heighten the risk of decades of proprietary smelting expertise being transferred abroad. Meanwhile, in a separate press release issued the previous day, Young Poong said its review of regulatory filings, court rulings and intercompany fund flows suggests that Choi and Ji Chang-bae, the former CEO of private equity firm OneAsia Partners and Choi’s middle school classmate, may have indirectly used 20 billion won of Korea Zinc funds to recover investments in Cheongho Comnet and pursue personal gains. Young Poong argued that the fund movements appear to have been driven by the interests of specific individuals rather than the company’s benefit, calling for a thorough investigation into the appropriateness of the transactions and potential breaches of fiduciary duty.

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12/15/2025

Aya Nomura Steps Up Heat on Fuji Media With Bid for 33.3% Stake

Bloomberg (12/15/25) Negishi, Mayumi

Activist investor Aya Nomura and affiliated entities are preparing to increase their stake in Fuji Media Holdings Inc. (4676) to gain as much as one-third of voting rights, ratcheting up pressure on one of Japan’s most influential entertainment conglomerates. The daughter of Japan’s most famous and controversial investor, Yoshiaki Murakami, Nomura and vehicles linked to her now hold more than 42 million shares of Fuji Media and plan to buy as many as 25 million more to gain control, if Fuji Media fails to take steps to spin off or sell its real estate operations, the Japanese broadcaster said Monday. Nomura also demands that Fuji Media set a minimum dividend-on-equity ratio of 4%, it said. Fuji Media — whose empire spans TV, satellite broadcasters, games and music — is trying to recover from a sex assault scandal that’s damaged its reputation and cost it sponsors and viewers. It’s been in a standoff against investors including Dalton Investments, which alongside Nomura has called for more accountability and a spinoff of its valuable but non-core real estate arm. Fuji Media has so far rejected such proposals. The company previously said it will consider issuing free stock acquisition rights if an investor buys up 20% or more of its voting shares. The move, seen as a poison pill, is often used to potentially dilute ownership of large shareholders. Last month, Fuji Media said it plans to achieve a return-on-equity of 5% to 6% in fiscal 2030, which it aims to raise to 8% in fiscal 2033. Shares of Fuji Media have more than doubled this year.

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12/15/2025

Carlyle to Acquire Japan's Hogy Medical for $1bn

Nikkei Asia (12/15/25)

Carlyle Group (CG) is set to acquire Hogy Medical (3593), a Japanese surgical kits maker, for about $1 billion through a tender offer, Nikkei has learned. Hogy Medical was owned 26.4% by a group led by Dalton Investments, a U.S. activist investor, as of June, with chief operating officer, James Rosenwald, on its board as an external director. The U.S. private equity firm intends to take the medical products maker private by purchasing all outstanding shares. Carlyle aims to raise the value of the company by revamping its marketing operations and helping develop new products. The Japanese company has been facing a slowdown in sales of surgical kits, its mainstay business, due to a deterioration of operations at key customer hospitals. Carlyle has been involved in the health care business through investments in a provider of medical clerical services and a staffing agency specialized in the health care and elderly care industries. Carlyle believes that Hogy Medical will be complementary to its existing investments and generate positive synergies.

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12/15/2025

Activist Metage Tells Pantheon International to Launch £500 Million Share Buyback Program or Go Private

Quoted Data (12/15/25)

Activist investor Metage Capital has increased the pressure on private equity fund Pantheon International (PIN) to buck up its capital allocation programme, demanding it sell at least £500 million, or 22%, of its portfolio to fund share buybacks. In an open letter to the investment trust’s board, London-based Metage, holder of 4.78 million PIN shares, a 1.1% stake, lambasted its “interminable strategic process” that while it has almost halved what was a 50% share price discount over three years ago, still leaves the stock trailing 28% below net asset value (NAV). That reduces its market value to £1.6 billion against net assets of £2.3 billion in August. Tom Sharp, Metage’s chief investment officer who took part in the unsuccessful investor rebellion at former hedge fund Third Point Investors this summer, said PIN’s board needed to launch a “step four” in its pledge to put shareholders first or take itself private like Apax Global Alpha did earlier this year. “We recommend that the board takes advantage of the low discounts seen in the secondary private market to make a meaningful disposal of at least half-a-billion pounds of assets and uses the resulting monies to buy back PIN’s shares,” he wrote. “In addition, the board should provide a detailed and transparent assessment of the company’s historical performance, the returns on the investments it has made and set out a clear strategy to address its performance issues, which amounts to more than trying to better time the market." “If none of these actions can achieve a consistent single-digit discount, then it should bring forward a solution similar to Apax Global Alpha,” Sharp concluded. While Metage is a relatively small shareholder, its demand follows a similar intervention last month by US activist Saba Capital after it took a 5% stake in the company. That suggests an investor base that may believe Pantheon’s campaign to improve returns has faltered after a strong “step one” saw it buy back £200 million of shares, mostly through a tender offer in 2023. PIN’s fact sheet shows its underlying net investment return has underperformed the MSCI World index over one, three, five and ten years up to August 31. The performance gap is widest over three years with an annualized net asset value total return of 2.2% versus the benchmark’s 13.3%. Excluding the positive impact of buying back cheap stock, the actual investment return from its portfolio of funds and direct company stake only been 0.3% a year since 2022, Metage calculates. This prompted Sharp to comment that “something fundamental” changed that year with a suspicion that higher interest rates had left Pantheon’s private companies unable to deliver sufficient earnings growth to cover increased finance costs, and that historic acquisitions to increase earnings had been too expensive in retrospect. The “step two” of a new capital allocation framework unveiled by outgoing chair John Singer had not lived up to expectations, with £57 million of shares repurchased in the last financial year, with buybacks only made when the shares stand more than 20% below NAV. He said PIN’s planned third phase of increased marketing lacked credibility given the chronic wide discounts that had persisted across the listed private equity fund sector for years. Analysts have pointed to rivals such as HarbourVest Global Private Equity (HVPE), which has done more than PIN in allocating 30% of the distributions it receives from investments to share buybacks. Sharp said the £500 million buyback proposal was “the minimum which we believe will make a meaningful difference.”

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