Rothkos And A Picasso Join List Of Activist Targets In Japan

(MENAFN- Live Mint) For years, a castle-like museum outside Tokyo was a secret spot for Japanese art lovers prepared to make a nearly two-hour trip from the capital to see its
collection of 20th-century masterpieces, including a Monet, a Picasso
and several Rothkos,
scattered throughout the
grounds.

Now the owner of Kawamura Memorial DIC Museum of Art,
a publicly listed chemicals maker struggling with financial losses, is considering selling its artwork or even shutting down permanently amid pressure from investors. Hedge fund Oasis Management, known for advocating shake-ups at targeted companies, has disclosed an 8.6% stake in
DIC Corp.

“The museum has been in the red for a long time,”
DIC spokesperson Hirotaka Komine told
Bloomberg News, declining to
comment on
Oasis in particular but referring to a general
push for rationalization and
higher capital efficiency. The company
will decide
what to do by the end of the year, and
close in late March to implement the changes which may include downsizing
or closing.
“It's hard to operate under the current circumstances,” he said.

The museum opened in
1990 and
houses art the company began
collecting
in
the 1970s. Many Japanese corporations and wealthy individuals embarked
on a shopping spree
for impressionist and modern art
masterpieces during the bubble economy of the 1980s,
encouraged by surging real estate and share
prices. The most famous example of this may have been the 1987 purchase of Vincent van Gogh's Sunflowers
by the insurer now known as
Sompo Holdings Inc.
for $40 million
- the highest price ever for a painting at the time.

In addition to its vast collection, which includes
works by Henri Matisse and Pierre-Auguste Renoir
as well as more contemporary artists like Mark Rothko and Cy Twombly, the Kawamura museum is also
known for its pastoral setting, featuring
a vast lawn studded with outdoor sculptures and a lake
with several swans.

Oasis founder Seth Fischer
says
that running the museum doesn't make sense today,
particularly given its small number of visitors.

“The museum is far away, it's not well-trafficked,” Fischer told Bloomberg TV in September.“Unfortunately, there's
more security guards most days than actual
people.”

Activist investors like Oasis and Elliott Management Corp. have for years launched noisy campaigns
against Japanese companies' ownership of underperforming businesses and trophy assets like
real estate. Such efforts have found increasing
success
in recent
years as the government's support
for governance reforms and the Nikkei's rise to record highs
helped cast such activist investors, often
viewed
negatively as corporate raiders, in a more favorable light.

“Clearly there is a a tailwind around corporate reforms and improved capital efficiency,” said
Tim Morse
at
Asymmetric Advisors, which advises institutional investors on Japan equities.“There is really very little reason why companies like DIC should have a valuable art collection that has nothing to do with the business.”

At the same time, DIC is facing growing calls
from the public to preserve the museum.
The mayor of the local town is
backing a public petition
calling for it to stay open, gaining
over 47,000 signatures
as of late September. E-commerce billionaire Yusaku Maezawa, whose collection has included
works
by Jean-Michel Basquiat, Picasso and Yayoi Kusama, is offering
to consider buying
important pieces
from Kawamura so
they remain in Japan. Many art critics also say
it would
be a shame to remove the works from their current, purpose-built setting.

“This museum is a great treasure, something Japan should be proud of,” said
Teiya Iwabuchi, editor
of art magazine Bijutsu Techo, adding that
its Rothko Room is particularly special,
with restrained lighting providing an
optimal setting for
the glowing hues of the painter's Seagram Murals
series.“Colors that you don't initially notice gradually begin to emerge. You wouldn't experience this sensation if you were seeing them right next to other artists' pieces.”

Critics have called on
DIC to give more consideration to social responsibility and philanthropy than benefits for shareholders. Most other corporate art collections
in Japan
such as Mori Art Museum and Suntory Museum of Art
are managed
by foundations, which benefit from tax breaks but face restrictions on selling art for profit.

DIC
owns
and manages
the museum. This
allows it to include the value of the artwork in its finances and to profit from sales, but also makes
the collection
an open target for those calling for better management.
The total book value for DIC's 384 works stood
at ¥11.2 billion as of end-June.

At the very least, the attention over its
future seems to have given the museum
a second wind. The company said on Monday that it would stay open through March rather than January as previously announced, thanks to a
surge in visitors.
On a recent Sunday, nearly a hundred people stood in line
to catch a shuttle bus to the museum, and
an employee had to ask some of them to find other modes of transport.

Mizuki Kanno, a company employee in her 20s, said she'd
been meaning to come
for years and
was put
off by the location.
“I just want to see it while I still can,” she said.

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