TOKYO (Realist English). U.S. activist fund Elliott Management has become one of the top three shareholders in Kansai Electric Power, Japan’s second-largest utility and a major nuclear operator, by acquiring a 4–5 percent stake, according to people familiar with the matter.
Elliott is pushing Kansai Electric to increase dividends and launch share buybacks by selling around ¥150 billion ($1 billion) in non-core assets annually. The fund estimates the company holds more than ¥2 trillion in non-core assets, including a large stake in a construction company and property valued at over ¥1 trillion.
Shares of Kansai Electric jumped more than 8 percent in Tokyo trading after the stake was reported.
The move comes amid a government-led corporate governance reform drive that has pressured Japanese companies to deliver greater transparency and higher returns. Goldman Sachs estimates that as of 2023, leading non-real estate firms held nearly ¥26 trillion in unrealized property gains on their balance sheets.
For Elliott, the stake represents its first move into Japan’s sensitive nuclear power sector. Kansai Electric operates 11 nuclear reactors, seven of them active, alongside thermal and renewable plants in the industrial Kyoto–Osaka region. The fund believes the utility could raise profitability by adjusting tariffs for large corporate clients and using low-cost nuclear power to attract new investment.
Kansai Electric posted ¥420.4 billion in profit last fiscal year and is already supplying power to a data center project in the Kansai region. While declining to comment specifically on Elliott’s stake, the company said it intends to maintain “careful dialogue” with shareholders.
Foreign activist funds have historically struggled with Japanese utilities. In 2008, the UK’s TCI sold its stake in J-Power after shareholders rejected its calls for higher dividends and management changes. But in 2023, Elliott succeeded in Tokyo Gas, forcing the company to implement buybacks and raise dividends, which drove its shares up nearly 50 percent.
Elliott is now seeking to replicate that playbook with Kansai Electric, whose stock had fallen 13 percent over the past year before Wednesday’s rally.
