Curi RMB Capital Demands JAE Cancel Tender Offer and Evaluate Alternative Buyout Offers

CHICAGO–(BUSINESS WIRE)–Curi RMB Capital believes the ongoing discount tender offer by Japan Aviation Electronics Industry, Ltd. (6807 JP, TSE Prime, “JAE”) does not represent the best interest of the shareholders of both JAE and NEC Corp (6701 JP, TSE Prime, “NEC”), and demands both companies cancel the tender offer, then reconsider alternative buyout offers they received from financial and strategic buyers.

In its press release on Feb. 15, 2024, JAE admitted it had received multiple buyout offers ahead of the ongoing tender offer. Multiple media outlets also reported NEC received a better buyout offer for the JAE’s shares NEC owns. Curi RMB Capital believes JAE and NEC should have examined such offers more seriously for the sake of the minority shareholders. However, we doubt both companies seriously considered such offers, based on their disclosures so far.

Further, Curi RMB Capital sees potential conflict of interests between the management of JAE and NEC and minority shareholders. Among the board members of JAE, Mr. Tetsuya Nakamura is originally from NEC. Mr. Masami Shinozaki, an executive advisor or “Sodanyaku” at JAE, was a former executive director and board member of NEC until he joined JAE in 1999. Curi RMB Capital suspects these executives at JAE may be able to influence NEC’s decision-making process so that their current positions at JAE are protected.

Curi RMB Capital demands JAE and NEC take the following actions:

(1) Cancel the tender offer

Curi RMB Capital believes that shareholders have lost confidence in the management teams of JAE and NEC due to the missteps in their disclosure. Forcing through the tender offer in this circumstance is not productive for shareholders. JAE should cancel the tender offer while NEC should give up tendering JAE’s shares it owns.

(2) Reconsider the “multiple buyout offers”

JAE and NEC should reconsider the multiple buyout offers they received prior to the tender offer. They should form independent committees, formed solely by independent directors, to evaluate such offers with the support of independent legal and financial advisors. These committees should evaluate buyout offers then accept an offer that is in the best interest of shareholders.

(3) Disclose additional information

JAE and NEC should disclose more information regarding the multiple buyout offers they previously received to better inform their shareholders. They should also disclose their decision-making process and explain why they did not accept these buyout offers. Curi RMB Capital believes forcing the tender offer without proper information disclosure will result in serious damage to both the trust and corporate value of JAE and NEC.

If JAE and NEC do not take these actions, Curi RMB Capital plans to seek the board minutes of JAE and NEC under court permission to evaluate their decision-making process that resulted in the tender offer, then pursue appropriate recourse against the board on behalf of shareholders.

About Curi RMB Capital

Curi RMB Capital is a national independent investment advisory firm that puts the client at the center of its mission to create accessible, tailored solutions to reach their long-term financial goals.

Formed in 2024 as the result of a merger between two experienced RIA firms aligned in culture and values, Curi RMB Capital brings in-house, institutional-quality investment expertise together with deep, holistic planning teams to deliver and implement customized strategies for each client. Curi RMB Capital serves individuals, physicians, family offices, and institutions. To learn more about Curi RMB Capital, visit https://rmbcapital.com/curi-rmb.

Contacts

Curi RMB Capital

japan@rmbcap.com