The best advice for a Japanese chief executive right now, confides an investment banking head in Tokyo, is to plot out a move so radical that nobody imagines you would ever consider it: the sale of seemingly indispensable assets, a full break-up, a transformative deal — something that goes way beyond anything you’ve already said you will do to raise corporate value.
Then put that idea in the company safe, mark it “emergency use” and keep the combination handy. The chances are rising that it will be needed before the end of 2025. Corporate Japan has been rumbled, and everyone needs a plan.
The recommendation, which the banker says he has dispensed to various worried CEOs since September, caps a year in which the environment for Japanese listed companies has fundamentally changed, at a pace that few would have considered plausible as recently as 18 months ago. Corporate governance abuse, woeful allocation of capital and the chronic playing down of shareholder interests are much harder to hide. The market is newly scary in ways that include the state-sanctioned concept of “takeover without consent”.