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Shareholder meetings of companies that closed their books in March are over. The peak day saw 1,457 companies holding meetings. At many of them, investment funds saw their proposals, most of which called for higher dividends, killed one after another due to opposition from other shareholders.
On the other hand, many companies succeeded in having takeover-defense plans approved. Although investment funds did not get their own way in many cases, company executives cannot sit idly by. Such funds are likely to be active at future shareholder meetings. Company executives will need to prepare themselves to deal persuasively with their proposals.
In response to the legalization May 1 of the so-called triangular merger — which changes the Japanese corporate environment by enabling a local subsidiary of a foreign company to use shares in its parent to purchase a Japanese company — 210 companies successfully moved to get plans for takeover-defense measures approved at their shareholder meetings in late June.
As the presence of investment funds became more apparent, the weight of individual shareholders increased from the viewpoint of management.
Bull-Dog Sauce Co., facing an unsolicited takeover bid by New York-based hedge fund Steel Partners, changed the date of its shareholder meeting to June 24, Sunday, so that many individual shareholders could attend. More than two thirds of shareholders supported a proposal to launch a defensive measure to fend off the takeover bid.
Some companies are moving to increase share-crossholding with other companies to defend themselves. Such a move, however, could deprive management of incentives to renovate business operations.
Many shareholders suspect that investment funds lack a long-term business strategy and are looking only for short-term profits, although some investment funds have made reasonable proposals from a long-range viewpoint. At any rate, their presence is likely to make executives rethink their way of doing business.
The Japan Times Weekly: July 14, 2007
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3月決算上場企業の株主総会が終わった。多くの総会では、投資ファンドの増配要求が、他の株主の反対のため否決された。
さらに、多くの企業は投資ファンドに対する買収防衛策を可決させたが、将来の買収提案に対し十分な準備を怠れない。外資の日本企業買収を容易にする三角合併の5月解禁に伴い、210社が買収防衛策を株主総会で可決させた。
ブルドック・ソースの株主総会は、米投資ファンドのスティール・パートナーズの敵対的買収提案に対する防衛策を可決した。
短期的利益を求めるだけと考えられている投資ファンドの存在は、経営戦略の再構築を促すことになろう。
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