Steel Partners cuts stakes in Japan firms by $1.7 bln

TOKYO, Jan 16 - Steel Partners has sold about 150 billion yen ($1.67 billion) worth of Japanese shares over the past year, public filings show, in a scaling back by one of the market's most influential activist funds.

Steel Partners, which holds sizable stakes in at least two dozen Japanese companies, appears to be selling mainly to return money to clients hurting from the financial crisis, analysts said.

The U.S. fund had as much as 390 billion yen worth of Japanese shares at one time last year, falling to about 240 billion yen this month.

But the sell-off could also hint at a shift in strategy for Steel Partners, which has experienced a mixture of success and failure in getting its diverse portfolio of target companies to boost returns.

"It spread itself too thin with its investment targets," said Kengo Nishiyama, a senior strategist at Nomura Securities.

"Fund cancellations may have played a big part in prompting Steel Partners to cut its holdings, but an effort to focus the portfolio seems to be another driver behind the move."

Steel Partners sold about 12.4 billion yen worth of shares in sewing machine and office equipment maker Brother Industries during a three-month period to Jan. 7, cutting its stake to below 4 percent from 10 percent, filings show.

The fund asked Brother in November to conduct share buybacks, though the company has not done so.

A press agency representing Steel Partners said the fund would not comment on individual trades.

Steel Partners cut its stakes in some companies to zero, but kept the same stake in wig maker Aderans Holdings Co, in which it had succeeded in bringing about management changes.

The U.S. fund grabbed headlines in May when it helped oust Aderans' president and most of its board, marking the first time that management of a Japanese company had been ejected under pressure from an activist fund.

Aderans also maintained its stake in beer maker Sapporo Holdings, whose shareholders approved anti-takeover measures last year to defy the fund's attempt to boost its stake.

Steel Partners cut its stake in Citizen Holdings to about 5 percent from 12 percent by selling about 25 billion yen worth of shares, according to the filings. COMPANY WITH SAME STAKE STAKE(%) Aderans Co 26.70 Sapporo Holdings Ltd 19.28 Noritz Corp 18.60 Takada Kiko Co 17.90 Fukuda Denshi Co 14.09 Nihon Tokushu Toryo Co 13.38 Tenryu Saw Mfg Co Ltd 11.36 Shofu Inc 10.31 New Cosmos Electric Co 9.25 Hi-Lex Corp 8.37 Ishihara Chemical Co 6.77 Miraca Holdings Inc 6.57 COMPANY WITH DECREASED STAKE NEW STAKE (OLD STAKE) Sansei Yusoki Co 23.05 (24.57) Nissin Food Products Co 10.62 (17.26) Maruichi Steel Tube Ltd 12.77 (14.20) Ezaki Glico Co 0 (13.37) Yushiro Chemical Industry Co 0 (13.22) Nakakita Seisakusho Co 0 (13.05) Citizen Holdings Co Ltd 4.96 (11.46) Chuo Warehouse Co 12.66 (12.22)*** Brother Industries Ltd 3.86 (10.17) Denki Kogyo Co 8.66 (9.84) House Foods Corp 5.86 (6.91) Inaba Denkisangyo Co 4.80 (6.02) Kaneshita Construction Co 4.54 (5.55) TTK Co 4.71 (5.82) Kikkoman Corp 4.02 (5.65) Hisaka Works Ltd 3.7 (6.34) Nisshinbo Industries Inc 3.0 (4.46) ***Stake rose for technical reasons. ($1=90.07 Yen)