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UPDATE 1-Murakami-linked fund backs out of bid for Japan Asia Group | Reuters

A Japanese fund backed by veteran activist investor Yoshiaki Murakami cancelled its offer for energy and environment firm Japan Asia Group (JAG), after pressuring private equity firm Carlyle Group to withdraw a competing bid last month.

On Wednesday, City Index Eleventh said it was withdrawing its bid after JAG refused to cooperate with its efforts to carry out due diligence and announced a large, special dividend.

Murakami is one of Japan’s few, well-known activist shareholders. His typical strategy includes building up a stake in a company in the middle of a takeover and demanding that management boost its sale price.

He was convicted of insider trading in 2007, but has resurfaced in recent years as an investor, agitating for change at companies including Toshiba Machine.

Carlyle had teamed up with JAG Chairman and Chief Executive Officer Tetsuo Yamashita in November for a management buyout of JAG, but gave up on its bid in February after City Index Eleventh built a stake in the company and offered a higher bid to buy the rest of the shares.

JAG shares were halted on the Tokyo Stock Exchange after trading earlier at around 1,083 yen. City Index Eleventh had offered 1,210 yen per share, more than double Carlyle’s initial offer of 600 yen and beating a later offer of 1,200 yen. ($1=106.8700 yen) (Reporting by Ritsuko Ando and Junko Fujita; Editing by Clarence Fernandez and Subhranshu Sahu)

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