HONG KONG--(BUSINESS WIRE)--Oasis Management Company Ltd. (“Oasis”) is the manager to funds that, collectively, are one of the largest shareholders of Sun Corporation (6736 JP) (“Sun”, “Sun Corp” or the “Company”).
In order to protect Sun Corp’s future and end management’s destruction of corporate value, Oasis has called an Extraordinary General Meeting (“EGM”) in order to replace Sun’s Board of Directors.
Oasis has nominated a new Board of Directors who will work together to turn around Sun Corp’s struggling domestic business by taking advantage of the ample growth opportunities available, grow its subsidiary Cellebrite, and collaborate with all of Sun’s stakeholders to increase long-term corporate value. Oasis will revitalize Sun Corp’s businesses and bring back the entrepreneurial spirit of Sun’s original founder, Mr. Masami Maeda.
For the last three years, Sun Corp, a Nagoya-based technology conglomerate, has recorded losses and is expected to post another loss this year. We believe that Sun Corp’s problems can be primarily attributed to its ineffective management team and failed oversight by the Board of Directors, which has led to Sun Corp trading at a deep discount to its intrinsic value.
In addition to the significant upside from restructuring the domestic business, Sun Corp also owns 71.55% of Cellebrite, a high-margin, high-growth international digital forensics and analysis business based in Israel, which Oasis values in excess of ¥150 billion to Sun Corp, implying an upside of over 240% to Sun’s current valuation.
Oasis has repeatedly sought to engage with Sun’s management in order to help improve the Company and stop the losses at the domestic business, but our attempts at constructive dialogue have been rebutted. Instead, Sun Corp management has continued to destroy significant corporate value, including through the third-party allotment of 24.42% of Cellebrite at a significant discount to its intrinsic value (Cellebrite’s management own the remaining 4.03%), and the recent issuance of convertible bonds and warrants at a large discount to their market value, with no apparent economic rationale other than to dilute shareholders.
In its latest earnings results published on February 14, the Company announced a loss of ¥2.77 billion for the nine months ended December 2019, and forecasted a loss of ¥3 billion for the full year ending March 2020, underscoring the urgency of these issues.
Seth Fischer, Founder and Chief Investment Officer of Oasis, said:
“Oasis is committed to helping foster the long-term growth of corporate value for all our investee companies, to the benefit of all stakeholders. The destruction of corporate value and egregious actions taken by Sun Corp’s management have compelled us to introduce a new Board that will transform and expand Sun Corp into the great company that it should be.”
Oasis urges all Sun Corp shareholders to review the full information on Oasis’s website www.abettersun.com, which outlines our view why shareholders should vote for Oasis’s proposals at the upcoming EGM. Together, we believe that we can stop the destructive force of the current Sun Corp management team and plant the seeds of a brighter, healthier future for Sun and all its stakeholders.
Stakeholders are also encouraged to contact Oasis at info@abettersun.com with any questions, comments, or suggestions.
Oasis Management Company Ltd. manages private investment funds focused on opportunities in a wide array of asset classes across countries and sectors. Oasis was founded in 2002 by Seth H. Fischer, who leads the firm as its Chief Investment Officer. More information about Oasis is available at https://oasiscm.com. Oasis has adopted the Japan FSA’s “Principles of Responsible Institutional Investors” (a/k/a Japan Stewardship Code) and in line with those principles, Oasis monitors and engages with our investee companies. Oasis’ statements are intended only to offer useful information to shareholders on Oasis’ proposals put for resolution in the EGM so that shareholders are able to make well-informed voting decisions for a better Sun Corp. This material is not intended to solicit voting in favor of Oasis’ proposals, to which rules concerning solicitation of proxies applies. Similarly, Oasis is by no means soliciting or requesting shareholders to jointly exercise their voting rights together with Oasis. Oasis disclaims its intention to be treated as a Joint Holder with other shareholders under the Japanese Financial Instruments and Exchange Act by virtue of its act to express its view or opinion or other activities to engage in dialogue with other shareholders in or through this website. This statement and related materials exclusively represents the opinions, interpretations, and estimates of Oasis in relation to the upcoming EGM. Oasis is expressing those opinions solely in its capacity as an investment advisor to the Oasis Funds.