UT Soft Law Review

UT Soft Law Review No.2 2010Within the category of (3), since the objective of takeover defense measures isto provide adequate time and information necessary for shareholders toappropriately decide whether to support or oppose the takeovers oropportunities for negotiation, information disclosure to shareholders is animportant issue. 13(a) Information disclosure by the target companyAs already noted, the board of directors should fulfill its responsibility toexplain matters to shareholders so they can decide whether to support oroppose the takeover. From such a perspective, it would be desirable forthe target company to disclose matters in specific detail, includingindicating financial figures, such as (1) management vision andmanagement policies of the incumbent management or an alternativeproposal, (2) evaluation of the purchase price by the incumbentmanagement, and (3) judgment of incumbent management, if any, thatthe takeover will be detrimental to the shareholder interests. 14The regular disclosure of management vision or management policies ((1)above), however, is a companies’ responsibility to shareholders. If suchdisclosure is made adequately, it would also be possible, in the face oftakeovers, to present the same material to shareholders, revised asnecessary with current information.(b) Information disclosure by the acquirer 15There are certain limitations to information disclosure by the acquirer,given that the acquirer does not undertake due diligence and thatdisclosing all specific figures, such as profit for the post-takeover period,is equivalent to forcing the acquirer to show his hand and would give rise13 The subject of examination here is the information provision that is required by or required from thetarget company, from the perspective of the managerial responsibilityfor explaining so that by usingtakeover defense measures shareholders can appropriately decide whether to support or oppose thetakeover. From the perspective ofensuring the fairness of capital markets and of providing and disclosingappropriateinformation to shareholders and investors, a disclosure system has been establishedunder theFinancial Instruments and Exchange Act, to which both the target companyand the acquirer must naturallycomply.14 However, with respect to the evaluation of the purchase price ((2) in this sentence), it would be difficultto demand to disclose the price which the management think would be appropriate.15 For shareholders to decide whether to support or oppose a takeover, it would be desirable to fairlysecure the opportunity for the acquirer and the target company todirectly explain matters such as theirproposals to, and to discuss and negotiate withshareholders. For this purpose, it would be desirable for theacquirer to be able to knowwho the shareholders of the target company are, such as by inspecting theshareholderregister. Even in the case that there is formally a cause for rejection of the acquirer’s request toinspect the shareholder register, it is not understood that the request canalways and uniformly be rejectedunder the Companies Act (Tokyo High Court decisionof June 12, 2008, on the Nihon Housing Co., Ltd.case).99