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Japan Pension Fund Assn to Judge Takeover Defense More Strictly

Tokyo, Mar 25, 2008 (Jiji Press) - Japan's Pension Fund Association, a major institutional investor, has set stricter criteria for judging whether to approve companies' takeover defense measures, it was learned Tuesday.

The association is now set to oppose in principle a scheme, in which a company targeted in a hostile takeover attempt issues share-purchase warrants to all shareholders and forcibly buys back the warrants allotted to the unwelcome bidder.

If an increasing number of Japanese firms adopt the scheme, more corporate acquirers would be attempted to urge target companies to buy back such warrants at prices higher than their issue prices, according to the association.

The type of takeover defense came into the limelight last year as Bull-Dog Sauce Co. <2804>, a time-honored Japanese Worcester sauce maker, used the scheme to fend off an unsolicited bid from U.S. investment fund Steel Partners Japan Strategic Fund (Offshore) LP.

Since Japan's Supreme Court supported Bull-Dog Sauce's scheme, several listed companies are now preparing to introduce similar measures.

But as the Pension Fund Association is poised to oppose the scheme, those companies may have to review their takeover defense strategies toward June, when many Japanese companies hold general shareholder meetings.

The association has invested about 3 trillion yen in shares of Japanese companies. Its overall balance of investment stands at 12.3 trillion yen.

By Jiji Press, (c) Jiji Press

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