Nippon Steel (TSE: 5401) will sell Osaka Steel shares back to the subsidiary at a 10% discount, cutting its stake to 51%, the two companies said on November 4.
Osaka Steel (TSE: 5449), which makes shaped steel and bars, is bidding JPY2,100 ($13.25) a share for 2.8mn of its own shares, or JPY5.88bn ($37.1mn), until December 3. The offer is open to all, but only Nippon Steel, which holds 55.58%, has a stated plan to tender its whole stake. A price below market gives outsiders little reason to join.
Osaka Steel’s 2026 tender price against the market and its 2025 offer. Source: Osaka Steel filings. IntelliNews
The sale leaves open a dispute over whether the group should keep Osaka Steel at all. At the June 24 annual meeting, activist investor Strategic Capital and its Japan-Up fund proposed that Osaka Steel buy out Nippon Steel’s entire holding, arguing that the parent had taken other listed units such as Sanyo Special Steel and Krosaki Harima private while selling down this one. With Nippon Steel’s votes excluded, the motion won 62.6%, short of the two-thirds it needed.
Osaka Steel’s board called that proposal abusive and said it would hand the activists about 40% of the votes. It has now sized the tender so that Nippon Steel ends on 51.00%, saying that leaving the group would be inappropriate. That leaves little room: about 540,000 more shares sold back would take the holding to 50%.
Nippon Steel’s holding in Osaka Steel, excluding treasury shares. Source: Osaka Steel and Nippon Steel filings, own calculation. IntelliNews
Nippon Steel is also the seller that least threatens the listing. Tradable stock stood at 28.54% in March against the Tokyo Stock Exchange’s 25% floor for its Standard market. Buying from outside investors would erode that figure, while the parent’s shares already fall outside the count.
The tender and a JPY2.06bn special dividend use up a JPY30bn payout plan from January 2025, which began with a JPY22.05bn tender. Osaka Steel has since lost JPY20.9bn in the year to March, after closing its Indonesian venture, and JPY2.97bn in the following six months. This round equals about two-fifths of the JPY19.7bn in cash equivalents it held in March.
Osaka Steel’s net profit. Financial years end in March. Source: Osaka Steel financial results. IntelliNews
AloJapan.com