(Adds detail)
By Makiko Yamazaki
TOKYO, March 2 (Reuters) - Japan's financial regulator
is considering expanding the range of transactions that require
a tender offer, in what would be the first revision of such
rules in 17 years, as unsolicited takeovers have become more
common.
The Financial Services Agency (FSA) on Thursday asked an
expert panel to review takeover regulations, following a rise in
unrestricted stake-building on the stock market that could
result in companies effectively being taken over.
Currently, an acquirer is required to make a tender offer if
it wants to buy more than a third of a company's shares off
market.
A tender offer gives all shareholders in a company the
opportunity to tender their shares to an acquirer usually at a
specific price and for a limited time.
But Japan's tender offer rules do not apply to
stake-building on the market, which experts say is a loophole
that allows an effective takeover without other shareholders
having a say on the deal.
The issue gained attention when Tokyo-listed Asia
Development Capital (ADC) built up most of its 40%
stake in printing press manufacturer Tokyo Kikai Seisakusho Ltd on market in a matter of weeks, enough to give it veto
rights over important board decisions.
The FSA also asked the expert panel to discuss to what
extent partial takeovers should be allowed.
Currently, an acquirer is required to purchase all shares
tendered by existing shareholders only if it aims to buy more
than two thirds of the target company.
Critics say such a partial tender offer could turn remaining
shareholders into minority shareholders of a listed company with
low liquidity in its shares.
In addition, the panel will also look into clarifying
existing rules that allow investors to make joint proposals to
companies without infringing disclosure regulations on joint
holders.
Under current regulations, investors deemed to be "acting in
concert" can be required to submit ownership disclosure filings.
Some investors say ambiguity in the rules has the effect of
discouraging shareholders from working together to improve
governance at companies.
Steps to allow companies to identify shareholders behind
custodians on their share registries more easily would also be
discussed at the panel, the FSA said.
(Reporting by Makiko Yamazaki; Additional reporting by Ritsuko
Shimizu; Editing by Sonali Paul and Jane Merriman)
