Colowide's recent acquisition of a large stake in rival restaurant chain Ootoya.

Itochu’s successful tender offer for sportswear maker Descente in 2019 (Itochu only increased its stake to 40 per cent, but this is still significant given that the increased share gives Itochu greater power to block shareholder motions) and.

Maeda Corp's successful 51 per cent control acquisition of its listed subsidiary Maeda Road Corp earlier in 2020 (despite a failed extensive search for a 'white knight' and large dividend payout as a defensive measure).

Even more significant: the emergence of the still rarer phenomenon of successful hostile takeover attempts. It seems that at last, there are indications of a developing hostile takeover market.įollowing a period from 2014-2018 where only five out of 215 tender offers were hostile (ie not supported by the target board), there were five in 2019. The enactment by the Tokyo Stock Exchange of the Japanese Corporate Governance Code in 2015 for example, which requires listed companies to follow (albeit only on a 'comply or explain' basis) the principle that 'anti-takeover measures must not have any objective associated with entrenchment of the management or the board', was one development to potentially tilt the balance of power back towards would-be hostile bidders – although this did not generate any significant change at the time. The lack of strong shareholder support for unsolicited bids, cross-shareholdings among listed companies and the ability of boards to adopt anti-takeover measures has contributed to this trend, but the landscape may be changing. The fact that Japan has become a hotbed for shareholder activism, combined with serially underperforming stock prices, should in theory lead to an increase in hostile takeovers.Īttempts (especially successful ones) have been historically rare in Japan.

Recent reports that Nitori is contemplating the launch of a competing (and potentially hostile) takeover bid for DIY and hardware stores operator Shimachu Co., is the latest development in what seems to be a shift in how such transactions are viewed in Japan. One avenue forward might be an increase in 'hostile' takeovers, which have the propensity to drive innovation through changes in management and long-term corporate strategy. Now, as the financial impacts of COVID-19 are becoming better understood, it is apparent that Japanese stocks are taking longer to rebound than say, their US and German counterparts.

Even before the outbreak of COVID-19, corporate Japan needed a 'shot in the arm' – economic growth has been stagnant for years, with innovation and ambitious corporate expansion seen as lacking across many sectors.

What is a hostile takeover