Tokyo Kikai shareholders approve poison pills, fight begins in court Reuters

Reuters. File photo: Tokyo Kikai Sisakusho Limited’s logo appears on October 21, 2021 at the company’s headquarters in Tokyo, Japan. REUTERS / Issei Kato / File photo

By Makiko Yamazaki

TOKYO (Reuters) – Tokyo Kikai Sisakusho Ltd. shareholders on Friday approved a “poison pill” measure aimed at blocking a takeover attempt by its top investor, setting up a court battle that would have a huge impact on unfavorable bids in Japan.

Tokyo Kikai, a little-known company that manufactures the country’s largest newspaper printing press, said most of its shareholders had approved a measure that would reduce Asia Development Capital’s (ADC) stake by 40%.

ADC excluded from voting Was and has already sought an order to cancel it. If investors had voted against the poison pill on Friday, it would have made the ADC the winner.

Tokyo Kikai said in a statement that about 79% of voters voted in favor of the poison pill. The ADC said Tokyo Kikai would have lost if the ADC had not been eliminated, because the ADC could have voted alone rather than voting for the poison pill.

Now, the focus will be on sanctions and the expected Tokyo District Court ruling next week that will examine attempts to exclude an investor from shareholders’ votes on a poison pill.

The victory of Tokyo Kikai will likely make it easier for other Japanese companies to use poison pills.

Tokyo Kikai says the ADC hits its corporate standards, while the fund argues that a ruling in favor of Tokyo Kikai would fly in the face of shareholder equality.

The war highlights both the rise of unfavorable takeovers in Japan over the past few years and what some experts see as a rule of inadequate takeover that leaves companies, especially small ones, with some protection against adverse bids.

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