Daikin shares jump 14% after Elliott pushes reforms

shares Daikin Industries It rose as much as 13.9% on Thursday after activist investor Elliott Investment Management said it would work with the company to improve performance and narrow the valuation gap with its peers. The stock later pared its gains and was up nearly 11% as of 10:40 a.m. local time.

“Elliott’s significant investment in Daikin reflects our belief that the Company’s market-leading businesses and impressive track record of long-term growth are materially undervalued by the market,” Elliot said in a statement on Thursday. he said.

Elliott added that Daikin’s upcoming medium-term management plan offers an opportunity to “address the root causes of this undervaluation by announcing concrete measures to expand margins, improve shareholder returns and review the portfolio of non-core activities.”

The US investment company did not disclose the size of its investment in Daikin Industries, but Japanese financial newspaper Nikkei reported On Wednesday, it was announced that Elliott Investment Management had acquired a nearly 3% stake.

Before Thursday’s rise, Daikin shares were little changed so far this year. Peers included Mitsubishi Electric And Hitachi While gaining 30% and 7.4% respectively, Panasonic’s increased by 46%.

Elliott’s statement came after Daikin in question On April 10, a class action lawsuit was filed in the United States against the Japanese company and others over allegations that they conspired to artificially increase prices for refrigeration equipment.

“In the complaint, the plaintiff requests compensation and other relief from the defendants, but the specific amount requested by the plaintiff was not disclosed,” Daikin said. he said.

Demand for heating, ventilation and air conditioning, or HVAC, systems has increased as data center construction accelerates, while prolonged heat waves have also increased usage among households and commercial users.

Founded in 1924, Daikin is one of the largest Japanese companies focusing on heating, ventilation, air conditioning and chemicals. The company operates in more than 170 countries, including Japan, China and North America.