Dai-ichi Life CEO expects unsolicited takeovers to become common practice in Japan
17/04/2024 09:00
By Makiko Yamazaki and Ritsuko Shimizu
TOKYO, April 17 (Reuters) - Unsolicited takeovers will
become common in Japan with time due to government efforts to
de-stigmatise the practice, Dai-ichi Life's 8750.T CEO said
after its success in clinching a $2 billion deal to acquire a
company with an unexpected bid.
The life insurer bid for Benefit One 2412.T in December
despite the employee benefits provider having already agreed to
a lower tender offer from digital health care information firm
M3 2413.T .
The move raised eyebrows in Japan, where unsolicited bids
are still rare and because life insurers are considered among
the most conservative of companies in the country's conformist
business culture.
"We decided to make the bid out of strategic necessity,"
Chief Executive Tetsuya Kikuta told Reuters in an interview,
saying the company needed to develop new businesses as demand
for insurance stagnates due to Japan's declining population.
"We had braced for more negative feedback to our move, but
thankfully, we heard many positive comments from people in
capital markets."
Though the bid was unsolicited, Dai-ichi Life did stipulate
that it would proceed with its offer only if Benefit One and its
parent company Pasona 2168.T agreed to the terms, underscoring
still deep reluctance among Japanese companies to wage hostile
takeovers.
Reputational issues associated with unsolicited bids were
discussed by Dai-ichi Life's board, but the government's new
takeover guidelines helped make the decision easier, Kikuta
said.
The Ministry of Economy, Trade and Industry last year
released M&A guidelines aimed at cracking down on excessive
defence tactics and encouraging takeovers, removing a long-held
stigma around unsolicited bids.
Executives at banks also say they are no longer hesitant to
finance or advise a hostile acquirer.
When asked if Dai-ichi Life could launch another unsolicited
bid, Kikuta said he didn't know but added: "I believe such deals
will become more common as time goes by."
An increase in unsolicited offers will likely push up deal
valuations in Japan as suitors for target companies would have
to bear in mind the possibility of counter bids, he said.
(Reporting by Makiko Yamazaki and Ritsuko Shimizu; Editing by
Edwina Gibbs)
((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))