On February 25, 2026, Tomoe Corporation, one of the core portfolio companies of Hibiki Path Advisors (from January 2026, Hibiki Path Advisors SPC), announced (i) a buyback of up to 10.8% of its outstanding shares excluding treasury shares (approximately JPY 8.0 bn) (Japanese only), and (ii) the recording of approximately JPY 3.0 bn in gains from the partial sale of investment securities, along with a corresponding revision to its earnings forecast (Japanese only).
The following day, February 26, 2026, the Company announced the results of the buyback and the completion of the cancellation (Japanese only), confirming that: (i) approximately 9%¹ of its outstanding shares excluding treasury shares (about JPY 7.0 bn) had been repurchased, and (ii) treasury shares equivalent to 17.1% of total outstanding shares had been cancelled.
We have long engaged with the Company on a daily basis and, through shareholder proposals and letters, have consistently requested fundamental measures to enhance corporate value. We view this series of corporate value-enhancing actions—the approximately 9% buyback, the roughly 17% cancellation of treasury shares, and the partial sale of investment securities (estimated at around 15% of holdings²)—as a positive step forward.
With respect to the buyback, the Company acquired shares at the closing price of JPY 2,010 on February 25. This was a large-scale repurchase executed at a very low valuation. The adjusted PBR was 0.65x³, after accounting for after-tax unrealized gains on non-core real estate holdings. Since the buyback was conducted well below adjusted net assets, the per-share figure increased by 3.5%, from JPY 3,116 to JPY 3,226. As a result, the post-buyback adjusted PBR declined to approximately 0.62x, and we view the Company’s shares as remaining substantially undervalued.
In light of this, we did not participate in the buyback. We see the Company’s recent actions as an important first step toward enhancing corporate value and remain committed to constructive engagement to support its further transformation.
¹ Total shares repurchased: 3,332,500 ÷ Outstanding shares excluding treasury shares: 36,896,848 (FY3/26 3Q earnings release)
² Gains on sale of investment securities: JPY 3.0 bn ÷ Other investment securities valuation differences: JPY 20.4 bn (FY3/26 3Q earnings release)
³ Real estate valuations are based on appraisals reported in the FY3/25 securities report, and capital figures are from the FY3/26 3Q earnings release.
(Our History of Engagement with Tomoe)
17/Nov/2025 ー Tomoe Corporation 2Q FY3/26 Results
3/Oct/2025 – Letter to Tomoe CORPORATION
13/Jun/2025 – ISS Endorses Hibiki’s Shareholder Proposals to Tomoe Corporation
5/June/2025 ー Comments on the Revision of the Medium-Term Management Plan
29/May/2025 ー Shareholder proposal for Tomoe Corporation
This letter does not constitute, and shall not be construed as, any proposal, solicitation, marketing, advertisement, inducement, or representation with respect to any service or product, nor does it constitute advice regarding the purchase or sale of any investment product or any type of investment, the making of any investment, the entering into of any transaction, or the refraining from any action (whether or not any terms or conditions are stated herein), and does not express any opinion regarding the merits of any particular investment or investment strategy. Any examples of strategies or transactions are provided solely for explanatory purposes and do not represent past or future strategies or performance, nor do they indicate the likelihood of success of any particular strategy. Furthermore, this letter does not constitute investment, financial, legal, tax, or any other professional advice. This letter has been prepared based on publicly available information (which we have not independently verified) and does not purport to be complete, timely, or comprehensive. We do not intend, either directly or indirectly, including through other shareholders, to propose at any shareholders’ meeting of Tomoe Corporation (Kabushiki Kaisha Tomoe Corporation, “Tomoe Corporation”) the transfer or disposal of the business or assets of Tomoe Corporation or any of its group companies. In addition, we do not have any intention to engage in any conduct that would make the continuous and stable operation of the business of Tomoe Corporation or its group companies difficult.