Investor Elliott builds key stake in Japan's Dai Nippon Printing - sources

January 24, 2023 10:06 AM EST

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By Jyoti Narayan and Makiko Yamazaki

(Reuters) -Hedge fund Elliott Management Corp has built a "significant" stake in Japanese automotive battery component supplier Dai Nippon Printing Co Ltd (DNP), sources familiar with the matter told Reuters on Tuesday.

Elliott, one of the world's most powerful activist investors, has become one of the top three shareholders in DNP with a significant position, said the sources, who declined to be identified as the matter is private.

DNP, with a market value of 829 billion yen ($6.36 billion) is among hundreds of listed Japanese companies undervalued relative to their assets.

A DNP spokesperson said the company had confirmed Elliott's investment late last year, but declined to comment on details.

The Financial Times, which first reported the news, said Elliott now holds a stake just under 5% worth $300 million.

Elliott declined to comment.

DNP dominates the market for metal masks for making organic light emitting diode (OLED) display screens for smartphones. The masks are used to coat light-emitting materials at precise locations on panels.

The company holds a majority share in the market for pouches to contain lithium-ion in electric vehicle batteries. It is also involved in developing a new chipmaking technology called nano-imprinting.

To address chronic stock underperformance, the company has been reducing cross shareholdings, a controversial practice of business partners owning each others' shares. It plans to announce a new business strategy in March.

Elliott has invested in several technology-focused companies, including a multi-billion dollar investment in software firm Salesforce on Monday.

It recently won a board seat at Pinterest Inc when the company added Elliott portfolio manager Marc Steinberg as a director.

In Japan, it has invested in SoftBank Group Corp and has an executive on the board of Toshiba Corp.

($1 = 130.2700 yen)

(Reporting by Jyoti Narayan in Bengaluru and Makiko Yamazaki in Tokyo; Additional reporting by Kiyoshi Takenaka and Akriti Sharma; Editing by Eileen Soreng and Bernadette Baum)

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