Does art have a place in business?

Japanese ink maker sells off Monet, Renoir paintings as activists circle

FACING more pressure from activist investors to increase returns, one Japanese company has turned to its art holdings, raising more than $100 million selling paintings by the likes of Monet and Renoir.

DIC Corp., an ink and resin maker, has a well-known collection of art, and some of the works are very valuable. It sold Claude Monet’s 1907 masterpiece ���⳾���é����, for about at a Christie’s auction on Nov. 17 in New York. Christie’s estimated earlier that it could sell for $40 million to $60 million.

DIC also auctioned seven more paintings including works by Marc Chagall and Pierre-Auguste Renoir, with total sales coming to about $106 million, according to Christie’s.

The auction followed calls from activist investor Oasis Management Co. to sell off DIC’s collection, that paintings aren’t part of the firm’s core business and they’ve weighed on its stock performance.

Many Japanese companies have been selling physical assets on their balance sheet like to generate profits to bolster their income statements. DIC’s sale of its art collection may do the same.

The moves are in line with efforts by the government and the exchange to increase stockholder value and attract global investors. Activists have joined this drive and pushed for changes in management, investment or business focus — at this year’s annual shareholder meetings, activists submitted a of proposals.

DIC also closed its Kawamura Memorial DIC Museum of Art in March and plans to reopen a smaller facility in Roppongi, Tokyo, around 2030 or later. It is looking to display in the new museum its seven paintings by Mark Rothko — the famed 20^th century abstract artist known for works showing fuzzy and luminous rectangular color fields.

Oasis Management’s founder and chief investment officer, Seth Fischer, has opposed building a new museum featuring the Rothko paintings.

“That’s like creating the world’s most expensive ,” said Mr. Fischer, whose firm is DIC’s second-largest shareholder. It’s “an inappropriate use of corporate assets.”

The Monet work is part of a series commonly called the Water Lilies that the artist worked on late in his life. Christie’s estimate for it compares with the price tag for ���⳾���é����, temps gris, also painted in 1907 that sold for $36.7 million in 2022, according to Cyanne Chutkow, the firm’s Deputy Chairman of Impressionist and Modern Art.

The DIC-owned painting “displays richer color, dynamic brushwork, and a luminous depiction of reflected sunlight,” she said by e-mail. “Monet’s market has shown sustained growth in recent years,” Ms. Chutkow said.

DIC, an abbreviation of the company’s previous name Dainippon Ink & Chemicals, Inc., has said it plans to sell about three-quarters of its 384-piece art collection. President Takashi Ikeda indicated at a news conference in March that the company would keep ���⳾���é����, along with the seven Rothko paintings.

The positive corporate image built by displaying fine art over decades in a museum “can’t be easily replaced,” he said.

LEAVING COLLECTION
Asked about the company’s decision to sell the Monet painting after all, a DIC spokesperson said that while the water lily piece is one of the representative works in the company’s collection, considering its responsibilities as both a business entity and an art holder, the firm decided to take it out of its collection.

The $106-million sale exceeded Christie’s estimates because the final price for a couple of the paintings, by and , were substantially higher than the auction house expected. The total was equivalent to about 77% of DIC’s net income last year of ¥21.3 billion ($138 million).

DIC already exceeded its goal of generating about ¥10 billion in cash by the end of 2025 through the initial sale of around 20 art pieces.

Many major Japanese companies from tire maker Bridgestone Corp. to beverage company Suntory Holdings Ltd. and oil refiner Idemitsu Kosan Co. have art collections and museums. But the collections tend to be in foundations that keep them out of reach of sellers.

Nana Otsuki, Senior Fellow at Pictet Japan and a member of an expert panel on national museum operations, said that storage facilities in the country’s public museums are nearing capacity.

Using digital tokens to establish ownership rights to artwork may be one way to protect private collections, Ms. Otsuki said. “Corporate support for the arts is meaningful, and leveraging private sector power is essential,” she said. — Bloomberg