Japan's Maeda Road to discuss cross-shareholdings with a rival amid hostile bid (updated)

HIS Co

27/02/2020 10:16

(Writes through, adds details)
    By Junko Fujita
    TOKYO, Feb 27 (Reuters) - Japanese road builder Maeda Road
Construction  1883.T , a target of a rare hostile bid by its
largest shareholder, will start talks with a rival, Nippo Ltd
 9913.T , about holding stakes in each other, the targeted firm
said on Thursday. 
    Maeda Road is trying to thwart the bid from Maeda Corp
 1824.T , which is aiming to increase its stake in Maeda Road to
51% from 24.68%, but Maeda Road President Ryozo Imaeda said the
potential alliance with Nippo was not aimed at thwarting Maeda
Corp's bid.  urn:newsml:reuters.com:*:nL4N29T1NC  urn:newsml:reuters.com:*:nL4N2AK0DC
    Executives of the both companies told a media briefing they
could boost their corporate value by holding a stake of about 5%
in each other. 
    "By forming a capital alliance we can expect synergies,"
said Imaeda. "We can reduce redundancies of our operation hubs
and share human resources to fend off labor shortage problems." 
    But an abrupt announcement of the potential alliance between
Japan's top road builders could buck a years-long trend of
companies unwinding the web of cross-shareholdings that
traditionally bound Japanese industrial groups.
    Maeda Road has been working on measures to counter the bid
from Maeda Corp. This month it announced a special dividend
payout of about $500 million as a defense strategy to reduce its
attractiveness.  urn:newsml:reuters.com:*:nL4N2AK0DC 
    Maeda Corp said separately on Thursday it could withdraw its
bid as the dividend payouts would reduce Maeda Road’s assets
beyond a level Maeda Corp set before launching the bid last
month.
    Maeda Corp also extended its tender offer period to March 12
from March 4. Maeda Corp is offering 3,950 yen a share. Maeda
Road shares closed at 3,300 yen on Thursday. 

 (Reporting by Junko Fujita; Editing by Clarence Fernandez)
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