TOKYO (Reuters) - Veteran activist shareholder Yoshiaki Murakami has failed to acquire a majority stake in printing firm Kosaido Co, his funds said on Thursday, blaming the setback on the entrenched practices of corporate Japan.
The failure of the country’s most prominent activist shareholder to buy control of the little-known company is likely to be seen as a victory for the old guard of Japan Inc, even as a new corporate code under Prime Minister Shinzo Abe has called on firms to boost returns and improve governance.
Kosaido on Thursday said shareholders had tendered 427,000 shares in the buy-out offer that expired a day earlier, or less than 5 percent of the minimum Murakami had sought. He was seeking to boost his stake to at least half and had offered 750 yen a share.
His bid was less successful than the failed management buyout attempt in April backed by Bain Capital, where shareholders tendered more than 5 million shares at the lower price of 700 yen, a difference his funds ascribed to the cozy relationships of corporate Japan.
“More shareholders tendered their shares to the management buyout even though that offer price was lower than ours,” the two Murakami-backed funds, Minami Aoyama Fudosan and Reno, said in a statement. Together his funds own around 13.5 percent of Kosaido.
“We would have to think that among those who tendered their shares to the management buyout but didn’t tender to our higher bid are listed companies whose shares are owned by Kosaido through cross-shareholding.”
Murakami has long battled against the practice of cross-shareholding, where companies hold stakes in each other to cement business ties. Critics, including Murakami, say the system protects boards at the expense of shareholders, leading to poor returns and shoddy corporate governance.
A former bureaucrat, he famously led a fund targeting Japanese companies and pushing for greater shareholder returns until he was convicted of insider trading in 2007. He has since resurfaced as an investor, working with his daughter.
Kosaido emerged earlier this year as the unlikely battleground between Murakami and Bain Capital, after both made competing bids for it, and Kosaido’s stake in a lucrative crematorium business.
His other recent targets include Yokohama-based car parts maker Yorozu Corp, which has said it had received a letter from Reno, urging it to abolish takeover defense scheme and cut its cross-shareholdings.
Shares of Kosaido finished flat at 728 yen on Thursday. The shares are up 90 percent this year, making it the ninth best performer among the more than 2,000 companies in the Topix index.
Reporting by Junko Fujita; Editing by David Dolan and Neil Fullick