Nidec's acquisitive CEO hails new Japan rules aimed at making takeovers easier

Takisawa Machine Tool Co

21/07/2023 06:20

By Makiko Yamazaki
       TOKYO, July 21 (Reuters) - New Japanese guidelines to
promote more mergers and acquisitions and remove a long-held
stigma around unsolicited bids will be a boon for the world's
top maker of electric motors, Nidec  6594.T , its chief
executive said.
    Shigenobu Nagamori, the bluntly spoken founder who built
Nidec into a global powerhouse by scores of acquisitions, told a
briefing on Thursday that Japan Inc's reluctance towards
unsolicited takeovers was hampering consolidation and preventing
firms from scaling up and competing globally.
    Nidec is now in the midst of an unsolicited bid. It has
repeatedly cited new draft rules from the trade ministry to
justify its 16.6 billion yen offer for Takisawa Machine Tool
 6121.T , which had initially rejected it in private.
    Nagamori welcomed the prospect of Japan becoming more
receptive to unsolicited bids.
    "We will have a better chance of buying a bigger company in
a shorter period of time," he said.
    Because unsolicited bids are seen as taboo, Nidec has
typically focused on buying and turning around money-losing
companies, he said, but "that takes time". He also complained
that "decent companies never come out on sale in Japan".
    The guidelines, to be finalised in late August, set out a
code of conduct for mergers and acquisitions (M&A), cracking
down on unreasonable defence tactics and other steps that should
reduce the reluctance for unsolicited takeovers.
    The rules, for example, say management should not spur a
credible takeover offer before notifying the board or allowing
it to give sincere consideration.
    In corporate Japan, unsolicited bids have been seen as too
adversarial. The taboo is such that Nidec was not able to find a
major securities firm to advise on its unsolicited bid, Nagamori
said.
    "People complain that many Japanese firms are trading below
their book value, but someone has to come up with specific
plans," he said. 
    "Who else can push Takisawa's stock price to 2,600 yen?" he
said, referring to Nidec's tender offer price with an 80%
premium.  
    Nidec is giving Takisawa 60 days to consider the proposal,
but plans to start the tender offer in mid-September even if the
Takisawa board does not agree on it.
    Nagamori also warned against the use of "poison pills",
which dilute the stakes of certain shareholders and defend
against unwelcome bidders, saying that strong performance and
high share prices should be the best defence.

 (Reporting by Makiko Yamazaki; additional reporting by Miho
Uranaka; editing by Robert Birsel)
 ((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))