Jaraa'idJaraa'id
Notification Show More
Latest News
Founder of Din Tai Fung chain, globally known for its xiao long baos, dies aged 96
Asia
Bank failures: lessons of past crises echo today
Business
Daniil Medvedev beats Roberto Carballes Baena at Miami Open, Frances Tiafoe wins ‘brutal’ clash, Cameron Norrie out
Sports
Biden declares emergency for Mississippi due to storm damage
United States
IMF’s Georgieva warns of increased risks to financial stability
Business
Aa
  • Home
  • Local News
  • Africa
  • United States
  • Europe
  • Asia
  • Sports
  • Videos
  • Live Score
  • More
    • Business
    • Market Data
      • Stocks
      • Commodities
      • Cryptocurrency
      • Forex
    • Weather
Reading: Japan’s new anti-takeover rules could spur protectionism, investors warn
Share
Aa
Jaraa'idJaraa'id
  • Somalia
  • Africa
  • United States
  • Europe
  • Asia
  • Business
  • Sports
  • Videos
Search
  • Home
  • Local News
  • Videos
  • World
    • Africa
    • United States
    • Europe
    • Asia
  • Market Data
    • Stocks
    • Commodities
    • Cryptocurrency
    • Forex
  • More
    • Sports
    • Business
    • Weather
    • Live Score
Have an existing account? Sign In
Follow US
Jaraa'id > Business > Japan’s new anti-takeover rules could spur protectionism, investors warn
Business

Japan’s new anti-takeover rules could spur protectionism, investors warn

News Room
Last updated: 2023/03/13 at 1:23 AM
News Room Published March 13, 2023
Share
SHARE

Investors will warn the Japanese government this week that a planned revision to rules on anti-takeover defence risks giving companies stealth protections against hostile domestic bids, foreign buyers and shareholder activists.

The investors, who are wary of more protectionism in a market where takeovers of listed companies are rare and managements are often loath to prioritise investors, told the Financial Times that the composition of the Fair Acquisition Study Group set up to debate the new rules appeared strongly skewed against shareholders’ interests.

The group was set up last November and, in a narrow three-week window that ends this week, is inviting public comments. “We are preparing our comments with a sense of urgency and deep concern. While a lot of the proposals look reasonable, [the study group’s] members and advisers are from the camp that has traditionally been called in to thwart activists and hostile takeovers, and the fear is that these are the people shaping the rules,” said the head of one US-based fund that has been involved in multiple activist situations in Japan.

In addition to strong representation from Japan’s conservative business and academic establishments, the 17-member study group includes lawyers and investment bankers with specific expertise in fending-off unsolicited takeover bids and shareholder activist campaigns.

No foreigners sit on the panel, despite non-Japanese funds holding roughly a third of the Japanese stock market, and the only foreign fund represented is BlackRock — an institution whose historic voting patterns mean it is widely seen as supportive of Japanese management.

An official at the Ministry for Economy, Trade and Industry (Meti) involved in setting up the guidelines said that lawyers known for helping companies to adopt anti-takeover measures were deliberately asked to join the panel since the new rules would not work without their co-operation. “If we want to make sure to avoid the misuse of anti-takeover measures, we need to involve lawyers who are actively making use of these measures,” the official said.

Representatives of more than six global funds said that they had engaged lawyers and were preparing to submit public comments to Meti by the filing deadline on March 15.

The funds are concerned that the new guidelines could be used in an overly protectionist way and would give target companies an excuse to block an offer that is beneficial for shareholders, said one lawyer.

Masatoshi Kikuchi, chief equity strategist at Mizuho Securities, said that despite efforts by Meti to reduce the range of pre-emptive takeover measures and other “poison pill” strategies available to Japanese companies, there had been an increase in companies introducing target-specific anti-takeover schemes in response to attacks by activist investors. One of these schemes was designed by a lawyer advising the study group.

According to Meti, it wants to update the rules on anti-takeover measures since they do not cover the target-specific defences, which they believe should require shareholder approval before adoption.

Lawyers representing the funds said that their warnings this week would focus on three key areas in which they felt woolly language could allow management to bury potential bids. Their first concern centres on the proposal that, when considering a proposed M&A deal, the board should judge whether it would enhance the target’s “enterprise value” — a term vague enough to allow the board to block an offer it did not like even if it offered value to shareholders.

Meti’s consultation paper also proposes that if a company receives a “concrete” takeover proposal, management should make a preliminary analysis and have it reviewed by the board. Investors fear that managements could hold off from sharing information with board directors because the term “concrete” is not quantifiable.

Meti’s proposals also fail to make clear whether and when a target company should allow a potential buyer to conduct due diligence on non-public information. The volume of information publicly available is limited in Japan compared with other developed equity markets.

The concern, said one lawyer representing several funds, was that management members should not be encouraged to frustrate an offer by blocking a bidder from conducting due diligence.

According to Meti, the new guidelines were specifically aimed at preventing company management from hiding a “concrete” takeover offer from the board. The term would be specified after seeking public opinion but, for now, Meti considers a concrete bid to have an acquisition price and target date of acquisition.

“When Japanese companies carry out overseas acquisitions, they mostly do unsolicited bids. And yet they hesitate from making unsolicited offers in domestic deals because of reputational concerns. We want to change that,” the Meti official said.

Read the full article here

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
I have read and agree to the terms & conditions
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
News Room March 13, 2023
Share this Article
Facebook Twitter Email Print
What do you think?
Love0
Sad0
Happy0
Sleepy0
Angry0
Dead0
Wink0
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular News
Asia

Founder of Din Tai Fung chain, globally known for its xiao long baos, dies aged 96

News Room News Room March 26, 2023
Bank failures: lessons of past crises echo today
Daniil Medvedev beats Roberto Carballes Baena at Miami Open, Frances Tiafoe wins ‘brutal’ clash, Cameron Norrie out
Biden declares emergency for Mississippi due to storm damage
IMF’s Georgieva warns of increased risks to financial stability
England rout Scotland in Six Nations opener as Sarah Hunter bows out in style
The teen mental health crisis: a reckoning for Big Tech
Manchester United, City, Liverpool and Newcastle all battle for £35m Gabriel Veiga – Paper Round
- Advertisement -
Ad imageAd image

You Might also Like

Business

Bank failures: lessons of past crises echo today

March 26, 2023
Business

IMF’s Georgieva warns of increased risks to financial stability

March 26, 2023
Business

The teen mental health crisis: a reckoning for Big Tech

March 26, 2023
Business

No more ‘dangerous’ money printing to fund war, vows Ukraine central bank chief

March 26, 2023
  • Somalia
  • Africa
  • United States
  • Europe
  • Asia
  • Cryptocurrency
  • Forex
  • Stock Market

About US

Jaraa'id is your one-stop website for the latest global and local news and updates, follow us now to get the news that matters to you.
Quick Link
  • Privacy Policy
  • Terms of use
  • Press ReleaseSubmit
  • Advertise
  • Contact
Top Sections
  • Business
  • Sports
  • Videos
  • Market DataLive
  • Weather

Subscribe US

Subscribe to our newsletter to get our Latest articles instantly!

I have read and agree to the terms & conditions

2023 © Jaraa'id. All Rights Reserved.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?