Recasts with comments and background in paragraph 3-8

TOKYO, Nov 19 (Reuters) - U.S. activist investor Elliott Management has taken a 5.03% stake in Tokyo Gas 9531.T, a regulatory filing showed on Tuesday, as it seeks to push Japan's biggest city-gas provider to boost shareholder value.

Elliott, one of the world's most influential activist investors, said in the filing that the stake was for investment purposes as well as to make important proposals depending on discussions with Tokyo Gas and related companies.

The U.S. investor views Tokyo Gas as a high-quality business, given its dominant market share in delivering gas to customers in the Tokyo metropolitan area, but its shares have been undervalued and underperforming, a person familiar with the matter said.

By divesting some assets from its extensive real estate portfolio that are non-core to main energy business, Tokyo Gas could improve capital efficiency, free up capital to enhance shareholder returns, and boost investments in decarbonisation and other growth areas, the person told Reuters.

Elliott has invested in a few Japanese companies between 2020 and 2023, including Softbank and Toshiba, and has accelerated its activity this year by taking stakes in three other companies before Tokyo Gas, the person said.

But this is the first time Elliott has bought more than a 5% stake in a Japanese company, according to the person.

Elliott is expected to engage in discussions with Tokyo Gas management to address undervaluation, rather than submitting shareholder proposals, the person added.

Tokyo Gas declined to comment on the deal.

(Reporting by Chang-Ran Kim and Yuka Obayashi; Editing by Himani Sarkar and David Evans)

((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))