Activist Shareholder Elliott Targets Mitsui OSK Lines
The well-known activist shareholder group Elliott Investment Management reported it has acquired a “significant investment” in Mitsui O.S.K. Lines. Recognized as one of the largest activist investors, it is reported to have nearly $80 billion in assets managed or advised through a series of funds.
In a brief statement on March 17, it reported the investment in MOL, without disclosing the size of its position. It recognized the company’s long track record (the company has been in business for over 140 years), while Elliott also highlights MOL as one of the largest diversified shipping companies. However, it believes it is not getting an appropriate market valuation. The company’s current market capitalization is nearly $16 billion.
“Despite this strong market position and high-quality assets, the market materially undervalues the business,” writes Elliott. “We are a significant investor in Mitsui O.S.K. because we see an opportunity to work constructively with the Company to ensure its upcoming medium-term management plan is appropriately ambitious, to reframe how it is viewed by the market, and to deliver the premium valuation it deserves.”
MOL traces its origins to the 1870s, although the modern company emerged after World War II and the rebuilding of the Japanese economy. As of its last report, the company has 935 vessels ranging from dry bulk to tankers, car carriers, and a small passenger operation, as well as being one of the three principal investor-owners of Ocean Network Express.
In January, it reported a small increase in revenues for the first nine months of its fiscal year but sharp declines in operating profits (16 percent) and overall profits (57 percent). It said that while the dry bulk market was firm, it had lower profits from the consolidation of Gearbulk and a soft market for its wood chip carriers. Tankers and car carriers were influenced by market conditions, while its portion of ONE contributed to a significant decline in profitability due to weak freight rates and market conditions.
The earnings report was made at the end of January, and the company, despite the issues, raised its outlook for the fourth quarter and the year. Takeshi Hashimoto, who has been with the company since 1982, assumed the role of President and CEO in 2021, saying his focus was on transforming MOL through investments to meet the challenges of a blue economy. Jotaro Tamura, who has been with the company since 1991, is set to become President & CEO, effective April 1, 2026.
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This is not Elliott’s first foray into shipping and the Japanese industry. Starting in 2013, it dismantled Sanko Steamship, an old-line Japanese company, selling off all its ships. It currently is also a large investor in Sea Drill and recently announced it had taken a large position in Norwegian Cruise Line Holdings and is pushing for a shake-up in the cruise line company.
Elliott is well-known for its recent efforts at Southwest Airlines and BP. It was also supporting a group that was the lead bidder for Citgo, and just recently announced it is targeting Toyota Industries, a maker of heavy equipment.