Selling Benefit One to Dai-ichi Life (2024)

Why let go now of the earner it had held so long?

The heart of this decision is that the founder himself undid a parent-subsidiary distortion he had carried for nearly twenty years. The “unwinding of listed subsidiaries” Oasis had demanded in 2017, Yasuyuki Nambu rejected at the time; six years on, he has carried it out himself, in the form of selling the group’s earner, Benefit One. The design of the transaction also draws the eye. Routing Pasona’s holding into a share buyback, and returning to the general shareholders’ tender price the tax benefit that arises when a deemed dividend is excluded from taxable income, was a structure that built in consideration for minority shareholders — a far cry from a sell-out that merely maximises the parent’s take. That the contest with M3 drove the price up also worked, in the end, in favour of both the seller and the general shareholders.

Even so, what remains after value has been turned into cash is the question ahead. Having lost Benefit One, Pasona fell into a consolidated operating loss the following year; in its core dispatch and BPO the gap in scale against Recruit and Persol only widened, and the regional revitalisation built around Awaji Island has yet to trace a path to profit. Where to allocate the roughly $739.3M (¥112bn) — to rebuilding the core, to investing in new fields, or to a large return to shareholders? That Oasis bought back into the stock right after the sale shows that realising a subsidiary’s value was not the end point of the tension over capital efficiency but the starting point at which the question turns back onto the parent itself. The verdict on this decision hangs on whether Pasona can stand up, by its own effort, a pillar of revenue to replace the earner it has sold.