Loeb says Fanuc's spending expansion no alternative to buybacks

Friday, Feb 20, 2015

Activist investor Daniel Loeb, whose hedge fund Third Point has taken a stake in Fanuc Corp , said the Japanese industrial robot maker's recent plan to boost capital spending was no alternative to fixing its "blatant capital inefficiency".

"We like that Fanuc is investing and expanding capacity," he told Reuters in an email interview. "But we take great issue with the inefficient balance sheet."

"The capacity expansions should not be thought of as an alternative to solving the blatant capital inefficiency of Fanuc," he said, adding that it was a good time to improve its capital allocation as Fanuc shares were "significantly undervalued today".

Cash-rich Fanuc on Monday said it would double its planned investment in a new factory to 100 billion yen ($844 million), although it said that move was unrelated to Third Point's call for more buybacks.

Loeb said Fanuc had not responded directly to his letter. He did not disclose the size of its stake but said it made it "one of the largest shareholders of the company."


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