Oasis Management, a hedge fund based in Hong Kong, has submitted an injunction to halt NEC from proceeding with the sale of its shares in Japan Aviation Electronics (JAE), citing potential harm to shareholders, as reported by Reuters on Monday.
The legal action, filed with the Tokyo District Court on February 20, alleges that NEC’s board of directors breached their fiduciary duty to shareholders by forgoing an opportunity to sell JAE shares at a higher price, resulting in measurable losses for NEC shareholders. Oasis, which has held over 3 million NEC shares since 2020, contends that the board’s decision is detrimental.
NEC reportedly received multiple buyout offers from global private equity funds for JAE before opting to sell the majority of its 51% stake to the unit at a lower price through a tender offer.
Sources revealed that at least three global funds had expressed their readiness to pay significant premiums to acquire the electronics component maker. JAE’s ongoing tender offer, running from January 30 to February 28, sets the price at 14% lower than the 3,040 yen closing before the announcement.
In its court statement, Oasis disclosed that it had proposed to acquire NEC’s shares in JAE for 3,000 yen per share on January 30.
Additionally, Chicago-based investor Curi RMB Capital has urged NEC and JAE to reconsider their buyback deals and explore other buyout offers. The fund expressed its intention to seek the companies’ board minutes, subject to court permission, to scrutinize the decision-making process and pursue appropriate action against the board on behalf of shareholders.
