TOKYO (Businesshala) – Japan’s Supreme Court on Thursday rejected a request by Tokyo Kikai Seisakusho Ltd to block plans to launch a “poison pill” takeover defense, Kyodo News reported on the implications of future hostile bids in the country. In the accompanying closely observed judgment said. ,
Tokyo Kikai can now issue new shares that will reduce the top shareholder’s 40% stake, a measure already approved by shareholders in a controversial vote that ousted the top shareholder.
The decision to investigate a bid to oust an investor from a shareholder vote on the poison pill defense has the potential to make it much easier for other Japanese companies to use poison pills to thwart a hostile takeover. .
The top shareholder, Asia Development Capital (ADC), has said that actions taken by Tokyo Kikai shareholders to exclude it as an “interested party” from the vote will fly to adopting the poison pill in the face of shareholder equality or No.
Lower courts concluded that the action was appropriate, as the vote was designed to allow other shareholders to decide whether the acquisition would harm their interests.
Governance experts say they are concerned about the potential implications of the court’s decision, which they say could be interpreted as authorizing the board to refuse to count the votes of certain shareholders depending on the circumstances. can.
Tokyo-based corporate lawyer Stephen Givens said who is an “interested” shareholder in the vote on the poison pill is “a question without clear answers”. The latest court ruling would “invite those parts of the lawsuit on which shareholders are allowed to vote,” he said.
On Wednesday, Tokyo Kikai said it would stop using the poison pill after the fund offered to reduce its stake to 32.72%. The manufacturer of the newspaper Printing Press said it would review the ADC’s proposal before making a decision to officially suspend the plan.