Chip materials maker JSR to nominate ValueAct exec to board

January 25, 2021 3:36 AM EST

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TOKYO (Reuters) - Japanese chip and display materials maker JSR Corp said on Monday it will nominate a partner of activist investor ValueAct Capital to be an external board director, a rare move in the country where activists are still viewed with suspicion by many.

The nominee, ValueAct's Robert Hale, marked a milestone in Japan's corporate governance two years ago by joining the board of medical equipment and camera maker Olympus Corp.

ValueAct Capital became a major shareholder in JSR with more than a 7% stake early last year. JSR, established in 1957 as a government-backed synthetic rubber maker, now supplies materials to global chip and display makers.

JSR will propose Hale to be named a director at its annual shareholders meeting in June. Shareholders will need to approve the nomination.

"Mr. Hale will bring valuable outside perspective, experience and international understanding that will help the company in making critical strategic decisions," JSR said in a statement.

The nomination "could push up JSR's stock price if the market takes it as a sign of the increased likelihood of a sale of the rubber business," Jefferies analyst Yoshihiro Azuma wrote in a note to clients.

Unlike other investment firms that push for change publicly and often ask for board seats at target companies, ValueAct prefers to work with management behind the scenes.

Reuters reported last year it had built a stake of over $1.1 billion in Japanese gaming company Nintendo Co Ltd.

(Reporting by Makiko Yamazaki; Editing by Edmund Blair and Louise Heavens)

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