Murakami-backed fund boosts Japan Asia Group stake before second bid

Market trading boards are seen at the Australian Securities Exchange in Sydney, Friday, February 9, 2018. ( AAP Image/Ben Rushton) NO ARCHIVING

TOKYO (Reuters) – A Japanese fund backed by veteran activist investor Yoshiaki Murakami has raised its stake in Japan Asia Group (JAG) ahead of a second takeover bid for the energy and environmental services firm.

Murakami’s City Index Eleventh, which withdrew a first bid after JAG announced a large special dividend payout, has increased its stake in the company to 24.20% from 22.53%, a government filing dated Friday showed.

The fund began building a stake in JAG after Carlyle Group teamed up with JAG chairman and CEO Tetsuo Yamashita on a management buyout in November.

The activist fund said in a separate statement that it could boost its stake close to 33% before launching a second bid at 910 yen per share for the JAG shares it does not already own.

City Index Eleventh had said Carlyle’s offer was too low and allowed JAG’s management to gain significant benefit at the expense of minority shareholders.

Carlyle doubled its offer price but withdrew its bid last month as JAG shares surged after City Index Eleventh made a counterbid.

JAG shares closed at 946 yen on Friday.

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