Yakult Honsha Co shares fell the most in 19 months after Danone SA, the world’s largest yogurt maker, announced plans to sell about US$1.8 billion of the Japanese company’s stock amid pressure from an activist investor to boost returns.
Yakult is to offer as many as 24.6 million shares held by Danone, including over-allotment, in a secondary sale, the Japanese company said. The shares are valued at ¥195.3 billion (US$1.8 billion) based on Yakult’s closing price on Wednesday.
While the move would cut the French company’s stake to about 7 percent, from the 21 percent it has held for more than a decade, it will remain Yakult’s largest shareholder.
Shares of Yakult tumbled 7.4 percent to ¥7,350 as of 1:53pm in Tokyo yesterday, the largest intraday drop since June 2016. Even so, the stock is still up 19 percent in the past year and has jumped eightfold since April 2000, when Danone first said it had acquired some shares in Yakult. Danone rose 0.6 percent in Paris trading on Wednesday.
The stake sale — which Danone described as being in line with its “disciplined capital allocation” — comes half a year after activist fund Corvex Management built a stake in the French maker of Activia yogurt and Evian water as it struggles to boost revenue. After the transaction, the companies will continue to work on expanding distribution of the Japanese yogurt-drink maker’s products in European markets including Spain. Danone previously sought to raise its stake in Yakult, a move which the Japanese maker opposed.
“We expect that there was slight pressure from the activist Corvex, which could be the reason for this move as strategically it made no sense any more for Danone to have such a large minority holding,” MainFirst Bank AG analyst Alain Oberhuber said.
The French company is selling a stake in a company whose sales are growing at a faster clip.
Based on latest available data compiled by Bloomberg, Yakult’s sales rose an average 4 percent in the five fiscal years ended March last year, while its net margin averaged 6.75 percent. Danone’s sales expanded an average 2.7 percent and its net margin averaged 6.71 percent in the five-year period ended December 2016, the data show.
The stake reduction will bring Danone more financial flexibility and allow management to focus on its core business, Oberhuber said. It is an ideal time to reduce the stake as Yakult shares have gained 29 percent in the past year, he added.
Danone did not comment on what it plans to do with the proceeds. Chief executive officer Emmanuel Faber has been trying to breathe new life into Danone’s largest business, yogurt and fresh dairy, as sales suffered from tougher competition and marketing missteps.
The Paris-based firm acquired soy-milk maker WhiteWave for US$10 billion last year as it seeks to branch out into faster-growing organic food and drinks.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last