Glass, Lewis Supports Steel Partners Proposals Against Aderans

Glass, Lewis & Co., a U.S. proxy adviser, urged shareholders of Japanese wigmaker Aderans Holdings Co. to vote against management-backed board nominees and in support of Warren Lichtenstein’s Steel Partners, which is proposing its own slate of board members.

The San Francisco-based firm recommended voting against directors and statutory auditors backed by Tokyo-based Aderans’s management and against allocation of treasury shares to a tender offer by Unison Capital Inc., which aims to buy at least 35.2 percent of the wigmaker, according to an e-mailed statement.

Steel Partners, which holds the biggest stake in Aderans, is urging fellow shareholders to oppose Unison’s bid at their May 28 annual meeting, saying the offer of 1,000 yen a share is too low for the wigmaker, which closed at 970 yen yesterday. Steel Partners also opposes Aderans’s board nominees, including three representatives of Unison, a Tokyo-based buyout fund with about $2.8 billion in assets.

“We don’t think that the 1,000 yen per share is sufficient, whether compared to historical trading or compared to book value,” Warren Chen, a managing director at Glass, Lewis, said in a telephone interview. “The other reason is that we didn’t see a clear reason why the management is recommending, or signed, this alliance agreement.”

Aderans said last month it reached an agreement with Unison, after almost four months of discussions, to take a majority stake in the wigmaker that will help it overhaul its business and strengthen compliance.

Steel Partners began investing in Aderans in 2004 and has a stake of about 26 percent. The U.S. fund voted out CEO Takayoshi Okamoto and six directors at Aderans last May, the first time a foreign fund had ousted management at a publicly traded Japanese company. Steel Partners nominated eight candidates to Aderans’s board in March.

“Corporate governance is in the spotlight” in Japan and elsewhere, said Chen of Glass, Lewis. “Shareholders need to state their rights on certain issues, and incumbent boards need to be aware shareholders do care, and shareholders are watching.”