Japan court declines to block Tokyo Kikai's poison pill defence -Kyodo (updated)
18/11/2021 07:19
(Adds context)
TOKYO, Nov 18 (Reuters) - Japan's supreme court dismissed on
Thursday a request to block a plan by Tokyo Kikai Seisakusho Ltd
6335.T to launch a "poison pill" takeover defence, Kyodo News
said, in a closely watched ruling with implications for future
hostile bids in the country.
Tokyo Kikai can now issue new shares that would dilute the
top shareholder's stake of 40%, a measure already approved by
shareholders in a controversial vote that excluded the top
shareholder.
The decision, the first to examine a bid to exclude an
investor from a shareholder vote on a poison pill defence, holds
the potential to make it much easier for other Japanese
companies to use poison pills to thwart hostile takeovers.
The top shareholder, Asia Development Capital (ADC)
9318.T , has said actions taken to exclude it as an "interested
party" from a vote by Tokyo Kikai shareholders on whether to
adopt the poison pill would fly in the face of shareholder
equality.
Lower courts concluded that the actions were justified, as
the vote was designed to allow other shareholders to judge
whether the acquisition would hurt their interests or not.
Governance experts say they are concerned about potential
implications of the court decision, which they say could be
interpreted as authorising a board to refuse to count votes of
certain shareholders depending on circumstances.
Who is an "interested" shareholder in a vote on a poison
pill is "a question without obvious answers," Tokyo-based
corporate lawyer Stephen Givens said. The latest court decision
"will invite reams of litigation over which shareholders are
allowed to vote," he said.
On Wednesday, Tokyo Kikai said it would put on hold the use
of a poison pill as the fund offered to lower its stake to
32.72%. The manufacturer of newspaper printing presses said it
would review ADC's offer before making a decision to officially
suspend the plan. urn:newsml:reuters.com:*:nL1N2S80Y4
(Reporting by Makiko Yamazaki; Editing by Clarence Fernandez)
((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))