Surge in foreign bids for Japanese firms only just beginning, says BofA's Komori (updated)
04/09/2024 09:23
(Updates to add share performance 10th-12th paragraphs.)
By Miho Uranaka
TOKYO, Sept 4 (Reuters) - A surge in foreign takeover
bids for Japanese firms is likely to accelerate, according to
Bank of America's BAC.N co-head of Japan investment banking,
Yuta Komori.
The rise in acquisitions has coincided with increasing
appetite for growth among Japanese companies and declining
resistance to partnering foreign firms, Komori said in a Sept. 3
interview about market trends, not BofA's business strategy.
WHY IT'S IMPORTANT
The increasing number of takeover bids reflects regulatory
effort to improve corporate governance, including new guidance
on how executives should respond to bids. It also reflects the
rising appeal of Japanese firms kindled by a weak yen and the
unwinding of cross-shareholding arrangements.
KEY QUOTES
Bidding "activity is becoming more active regardless of
sector. It's only going to increase from here."
"Just as there are options to bolster one's business
domestically or to go overseas and strengthen it, there are
naturally options to improve corporate value by partnering with
foreign companies."
"The Japanese capital market is the most dynamic market in
the world right now."
CONTEXT
Canada's Alimentation Couche-Tard ATD.TO on Aug. 19 said
it had approached 7-Eleven convenience store operator Seven & i
3382.T about a potential takeover, in what would be the
largest-ever foreign buyout of a Japanese company.
Other large bids of late include Blackstone's BX.N offer
to take private digital comic distributor Infocom 4348.T and
Carlyle's CG.O acquisition of KFC Holdings Japan 9873.T .
BY THE NUMBERS
Foreign acquisitions of Japanese companies doubled to 902.2
billion yen ($6.20 billion) in the first half of the year
compared with the same period last year, LSEG data showed.
Seven & i shares have underperformed the benchmark Nikkei
gauge over the past decade amid activist investor complaints
about the company's management and asset structure.
The company's shares jumped by nearly 23% percent on
Aug. 19 on news of the Couche-Tard offer.
($1 = 145.4200 yen)
(Reporting by Miho Uranaka; Writing by Rocky Swift; Editing by
Christopher Cushing and Kim Coghill)
((rocky.swift@thomsonreuters.com))