UT Soft Law Review

UT Soft Law Review No.2 2010Court found that SP was an “abusive bidder” and held that the defense measure was lawful.Steel Partners appealed to the Supreme Court. On August 7, 2007, the Supreme Courtaffirmed. The Supreme Court’s opinion was somewhat similar to that of the Tokyo DistrictCourt. The highest court held that because the defense measure was approved byshareholders, the necessity requirement was met, and because it provided SP with justcompensation, the proportionality test was satisfied. It also held that because the measuresatisfied the proportionality test, it did not violate the purpose of the principle of equaltreatment of shareholders. 16The Steel Partners’ tender offer ended on August 23, 2007. Only 1.89% of all outstandingshares were tendered. On August 30, 2007, Bulldog Sauce introduced an advance warningstyle pre-bid defense plan.Under the circumstances, the Corporate Value Study Group at the METI presented twopolicy discussions in its report on June 30, 2008. 17 First, it pointed out that relying too muchon the approval at the shareholders’ meeting is sometimes misleading and not recommended,because it would encourage inefficient building of stable shareholding. Second, it pointed outthat cashing out the bidder is not desirable, because it would encourage inefficient bids.Report by the Corporate Value Study Group in 2008Obtaining time,information andopportunity ofnegotiationDilution wheredestroying firm valueis clearDilution where adecision is made asto whether firmvalue decreasesCash payment Not necessary Not necessaryShowing reasonswhere cash paymentis not necessaryApproval by theshareholdersmeetingNot necessaryNot necessaryProviding code ofconduct for theboard of directorsApproval by thespecial committeeNot necessaryNot necessaryProviding code ofconduct for theboard of directors16 See Tokyo High Court Decision on May 12, 2008, 1282 Hanrei Times 273 (Pikoi), where a defense actionthat is similar to the one adopted by Bulldog was attempted without shareholder decision and the courtenjoined it.17 Ministry of Economy, Trade and Industry, Corporate Value Study Group, Takeover Defense Measures inLight of Recent Environmental Changes, June 30, 2008.7