Aurelia Butler

NEW YORK (Reuters) -Activist investor Ananym Capital Management is urging healthcare products distributor Henry Schein (NASDAQ:HSIC) to refresh its board, cut costs, tackle succession planning and consider selling its medical distribution business, sources close to matter said on Monday.A sale of the medical distribution business could help drive up the share price by roughly 20%, while earnings per share could jump by some 35% if spending were curtailed, Ananym has told Schein executives, according to the sources.Henry Schein shares closed up 7.5% at $73.89 on Monday. Since January, it has lost roughly 2% in a market that has seen record highs this year.Ananym, a newly launched firm run by veteran investors Charlie Penner and Alex Silver, argues that Schein needs new board members and ultimately a new chief executive to tackle spending that has spiraled out of control, integrate recent acquisitions and nurture and hold onto new talent, the sources said.The new firm is concerned that Schein, currently valued at $9 billion, is complacent and satisfied to outperform only its direct dental distribution peers Patterson and Benco, instead of competing with the largest U.S. healthcare distribution companies like Cardinal Health (NYSE:CAH), Cencora, and McKesson (NYSE:MCK).Ananym has held informal talks with the company but is now stepping up the pressure with calls for new directors, a plan to replace CEO Stanley Bergman, who has been in the position for 35 years, and tackle other strategic priorities, the sources said.”Henry Schein regularly engages in dialogue with its shareholders with the goal of enhancing shareholder value. We analyze any shareholder input in that context,” a company representative said.The two Ananym partners have prominent resumes in the activist world. Penner, successfully challenged Exxon Mobil (NYSE:XOM)’s board in 2021 at upstart investor Engine No. 1 and previously was a partner at activist Jana Partners. Silver was a founding partner at P2 Capital Partners (WA:CPAP).The new firm, which has some $250 million in capital and began putting money to work in September, is focused on constructive, value-enhancing engagements with mid-sized public companies.Ananym has told Schein that it has recruited qualified director candidates who could replace some of the company’s 13 board members who have served too long and lack relevant industry experience, the sources said.After Schein spent more than $4 billion on acquisitions in the last five years, Ananym wants it to focus on integration of newer assets rather than on additional purchases. Shareholders who have been frustrated by the company’s decisions would gain confidence in its leadership if M&A activities were curtailed and the company were to buy back stock, Ananym has argued, the sources said. The new investment firm is pushing Schein to consider selling the medical distribution business, where it says it is quickly becoming tougher to compete and the company is not positioned to generate long-term, sustainable free cash flows. That business could be valued at $2.5 billion or more in a sale, Ananym has argued, according to the sources. The company could use proceeds to repurchase its undervalued shares, the sources said. More

TOKYO (Reuters) – The Bank of Japan will release next month its findings on the pros and cons of the various unconventional monetary easing tools used in its 25-year battle with deflation, in another symbolic step towards ending its massive stimulus.While the BOJ has said the outcome of the review will not have direct implications on near-term monetary policy, it will likely include findings and surveys that justify its plan to steadily proceed with policy normalisation.The BOJ will release the findings after its final policy meeting of this year on Dec. 18-19, when some analysts expect it to hike interest rates from the current 0.25%.The review will be the BOJ’s first attempt to take a deeper, analytical look at the drawbacks of prolonged monetary easing.Notably, it will likely explain how central banks have limited power in changing public perceptions about future price moves, as seen in the mixed results of former Governor Haruhiko Kuroda’s radical stimulus that sought to shock Japan out of a deflationary mindset.The findings of Governor Kazuo Ueda’s flagship project, which began when he took office in April last year, may offer insight into what tools the BOJ would use – and prefer not to use – in dealing with the next economic downturn.It may also include hints on what risks the BOJ may focus on as it continues to taper asset buying and raise interest rates from still-near zero levels.”We hope to provide material that will be useful in thinking about desirable monetary policy in the long run,” BOJ Governor Kazuo Ueda told a news conference on Oct. 31.The review may become a handy guide for other central banks as an encyclopedia of unconventional easing tools and their efficacy.Japan’s 25-year experience of deflation and economic stagnation forced the BOJ to become a pioneer of unconventional policies such as zero interest rates and quantitative easing.Other global central banks later resorted to similar radical measures during severe downturns such as the global financial crisis and COVID pandemic, but have been largely able to exit them fairly quickly when their economies began bouncing back.As a board member, Ueda played a key role in the BOJ’s introduction in 1999 of forward guidance – or a promise to keep rates low for a prolonged period in hope of stimulating demand.The most controversial policy came in 2013 when, under Kuroda, the BOJ launched a huge asset-buying scheme that later combined negative interest rates and bond yield control.As inflation continued to fall short of its 2% target, the BOJ conducted several reviews on the side-effects of prolonged easing, mostly to extend the lifespan of its stimulus.This time, the review will take a step-back approach on what did not quite work. Specifically, it will explain how Kuroda’s stimulus reflated growth and created jobs, but pushed up inflation only by 0.7 percentage point – not enough to achieve the BOJ’s target.It will also highlight key flaws such as how the BOJ’s huge asset buying and bond yield cap drained market liquidity, distorted asset pricing, eroded bank profitability and forced financial institutions to increase high-risk lending such as those to the property sector.Such findings will be based on nearly three dozen academic research papers by its staff, many of which have already been released by the BOJ.WHAT’S NEXT?Another takeaway would be findings and surveys showing how Japan is experiencing structural changes that allow for the BOJ to raise borrowing costs.Among them will be a survey conducted by the BOJ’s branch offices that showed how more companies now see rising prices and wages in a more positive light than in the past.Other research to be included in the review will explain how a tightening job market and rising material costs are shifting firms away from their long-held aversion to price hikes.In a speech in May, Deputy Governor Shinichi Uchida said Japan was on the cusp of eradicating a “deflationary norm,” or the perception of households and firms that prices and wages won’t rise much – remarks preluding the review’s highlight.The BOJ, however, won’t delve into thorny topics such as the cost of its huge holdings of exchange-traded funds (ETF), which could hurt its balance sheet if stock prices tank.It is also unlikely to offer a pin-point estimate on Japan’s neutral rate of interest, or the rate at which monetary policy is neither contractionary nor expansionary.The BOJ has not disclosed its own estimate on the neutral rate, which is crucial for gauging how far it may push up borrowing costs. Analysts put it somewhere around 1%, well above the BOJ’s current policy rate of 0.25%.Taken together, the review will aim at taking a neutral, scientific view over the controversy surrounding the BOJ’s radical stimulus that led a deep and sometimes emotional rift between its proponents and critics.”There won’t be straight answers to many of the issues the review touches on. But the point was to hold discussions on past monetary easing steps and highlight some positive changes happening in the economy,” said Mari Iwashita, chief market economist at Daiwa Securities and a veteran BOJ watcher.”It’s a good way to move on and comes at a nice timing, when Japan is finally seeing early signs of sustained inflation.” More

$1 for 4 weeksThen $75 per month. Complete digital access to quality FT journalism. Cancel anytime during your trial.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

$1 for 4 weeksThen $75 per month. Complete digital access to quality FT journalism. Cancel anytime during your trial.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More