Opposition to Proposed Tsuruha-Welcia Merger Gains Momentum, Orbis Supports Glass Lewis and ISS Recommendations to Vote AGAINST the Merger

Orbis Investments (“Orbis”), which held 9.7% of Tsuruha Holdings Inc. (“Tsuruha”) as of 28 February 2025 on behalf of its clients, is encouraged to see that opposition to the proposed merger with Welcia Holdings Co., Ltd. (“Welcia”), a company controlled by AEON Co., Ltd. (“AEON”) is gaining momentum with recommendations from both Glass, Lewis & Co., LLC (“Glass Lewis”) and Institutional Shareholder Services Inc. (“ISS”) that Tsuruha shareholders vote AGAINST the proposed transaction.

“It’s encouraging to see that two of the leading independent proxy advisory firms have now expressed serious concerns about multiple aspects of these proposed transactions,” said Brett Moshal, co-head of the Japan investment team at Orbis. “It’s a sign that opposition to the deal is gaining momentum. With two thirds of votes required to approve this merger, there is a very real possibility it will be defeated at the 26 May AGM. The terms and structure are outrageous. We strongly encourage shareholders to vote AGAINST it.”

Why Orbis Believes this Proposed Transaction is a Poor Outcome for Tsuruha Shareholders

Orbis originally expressed its strong opposition in a public statement on 12 April 2025. The proposed merger forms part of a series of transactions that, if completed, would ultimately hand AEON control of Tsuruha without fair compensation for Tsuruha’s minority shareholders and without the opportunity for shareholders to exit by way of a cash offer.

AEON plans to gain control of Tsuruha through a series of steps ending with a tender offer at ¥11,400 per share—nearly 27% below the ¥15,500 per share AEON paid to acquire a 13% stake from Oasis Asset Management in March 2024. Orbis believes that the merger and tender offer severely undervalue Tsuruha and would ultimately expose its shareholders to significant risks as minorities in a listed AEON subsidiary.

Orbis maintains that any change-of-control transaction should be conducted via an all-cash offer to Tsuruha’s shareholders at more than the ¥15,500 per share AEON paid to Oasis Asset Management last year, to reflect a reasonable control premium. Tsuruha’s board of directors should conduct a market check, actively solicit competing proposals that might deliver greater value, and provide transparency by disclosing their findings to shareholders.

While Orbis is supportive of industry consolidation in principle, such transactions must be conducted through a fair and transparent process, and on equitable terms. This one fails on both counts.

A Step Backward for Corporate Governance Reform in Japan

Orbis has a long history of investing in Japanese companies and has been a longstanding shareholder of Tsuruha for 25 years. At a time when Japan has taken meaningful and encouraging steps toward corporate governance reform, Orbis believes these proposed transactions are a material step backwards.

Orbis Urges Investors to Vote AGAINST the Proposed Merger at 26 May AGM

For the reasons above—which reflect concerns raised independently by ISS and Glass Lewis—Orbis calls on all shareholders who care about the fairness and integrity of capital markets to vote AGAINST the proposed merger at the upcoming 26 May 2025 Annual General Meeting. The merger requires a two-thirds majority, and is the only opportunity for Tsuruha shareholders to vote on one of the series of transactions that would hand control of Tsuruha to AEON at a steep discount to fair value.

The information contained in this press release is intended solely to share Orbis’ views as a long-term shareholder in Tsuruha Holdings Inc. It does not constitute any solicitation to exercise shareholders’ voting rights (either independently or jointly with Orbis) or to delegate such rights to Orbis, and Orbis is not seeking any shareholders’ agreement regarding voting. Orbis is not soliciting or accepting any proxies, and encourages all shareholders to make their own voting decisions based on publicly available information and their own judgement. This press release reflects Orbis’ opinions exclusively. Nothing in this press release constitutes investment advice.

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