Bloomberg News

Southeastern Asset Requests Independent Audit of Olympus

October 31, 2011

(Adds comment from Southeastern in fourth paragraph.)

Oct. 31 (Bloomberg) -- Southeastern Asset Management Inc., which owns 5 percent of Olympus Corp., wants an independent probe into takeover fees paid by the Japanese company, the U.S.- based fund said in a letter to the board it made public today.

Olympus, the world’s largest maker of endoscopes, lost more than half its market value after Chief Executive Officer Michael C. Woodford was fired when he questioned the $687 million in advisory fees for the 2008 takeover of Gyrus Group Plc.

The company hasn’t made public who received the Gyrus fees, which amounted to about 34 percent of the value of the $2 billion acquisition. Olympus released a statement on Oct. 27 saying the amount was “not unreasonably high.”

“Olympus has ostensibly justified the payment of unconscionable fees by claiming the advisors offered target identification and strategic advisory services above and beyond what could be provided by the world’s most prolific and experienced advisory firms, which typically charge between 1% and 5% of the deal price,” Mason Hawkins, chairman and chief executive of Southeastern Asset, said in a statement.

Southeastern is initiating action to compel release of the board minutes related to the deal, the statement said.

Olympus will probably form an investigation committee within two weeks, Shuichi Takayama, the president appointed last week to replace Tsuyoshi Kikukawa, who stepped down 12 days after taking Woodford’s place, said on Oct. 26. He declined to say when the panel is expected to complete its work or to elaborate on who would be selected for it.

--Editor: Aaron Sheldrick

To contact the reporter on this story: Peter Langan in Tokyo at plangan@bloomberg.net

To contact the editor responsible for this story: Aaron Sheldrick at asheldrick@bloomberg.net


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