TOKYO (Reuters – Tokyo Kikai Seisakusho Ltd shares approved a “poison tablet” measure Friday to stop a takeover by the top investor. It will lead to a battle in court that could result in major implications for Japan’s hostile bidders.
Tokyo Kikai (a relatively unknown company) said that the majority of shareholders supported a plan to reduce Asia Development Capital’s 40% stake.
ADC was excluded https://www.reuters.com/business/sustainable-business/court-battle-raises-question-how-far-will-japan-swallow-poison-pills-2021-10-21 from the vote and has already sought an injunction to nullify it. ADC could have been victorious if the investors had voted for it on Friday.
Tokyo Kikai stated in a statement that 79% supported the poison pill. ADC claimed that Tokyo Kikai would be defeated if ADC were not included, because the numbers of poison pill votes received were less than ADC could.
The injunction will now be discussed.
Tokyo Kikai’s victory could make it more difficult for Japanese companies to take poison pills.
Tokyo Kikai claims ADC damages its corporate value. The fund counters that Tokyo Kikai would be in favour of shareholders equality.
It highlights both an increase in hostile takeovers of Japan over the last few years, and what many experts view as insufficient takeover regulations that leave smaller companies without any defenses against hostile offers.
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