In the past month, an interesting situation has been unfolding in Japanese company Soft99. What started as a management-led MBO, is now being challenged by a major shareholder. Most recently, an aggressive activist investor has also joined the fray. This ongoing battle captures exactly where Japan’s market for hostile takeovers is now. Management announced a take-private at a premium, setting up the usual special committee, and putting out valuation work. A large shareholder then came in with a competing TOB and a public case that the original management price under-valued the business. From the start, it’s a rules-driven march with independent committee updates, board opinions, target notices, bidder amendments, and shareholder voting/tendering, with the added wild card of new activist investor. The contest is essentially: whose price, terms, and post-deal plan clear the procedural bar — and persuade shareholders old and new.
The hostile takeover has come a long way. For years, unsolicited bids were rare and culturally disfavored. That changed in 2005 when Livedoor tried to pry open Fuji Television’s control chain via Nippon Broadcasting. The public watched like a courtroom drama and regulators moved to clarify when boards could defend “corporate value.” Shortly after, in 2007 Bull-Dog Sauce won Supreme Court backing for a shareholder-approved poison pill against a foreign fund. In 2008, the government blocked TCI at J-Power on grounds of national interest. The flurry of activity was promising, but the clear message was that hostile moves could and would be stopped, especially if they were perceived as predatory.
In the mid-2010s the Stewardship and Corporate Governance Codes reframed perception. Companies were pushed to unwind cross-shareholdings, explain capital policy, and run cleaner transparent processes. The focus of media coverage of takeovers shifted from moral judgment to mechanics.
In 2019, Itochu made a hostile bid for Descente. This was an unabashed frontal assault. Itochu, already a major shareholder, launched a successful unwelcome TOB, consolidated effective control, and reshaped leadership. Press coverage was strikingly neutral, setting out Itochu’s case (discipline, strategy, and capital allocation) and management’s reasons for resistance (brand autonomy and long-term direction). Investors largely welcomed the discipline demanded by Itochu, while brand loyalists and local stakeholders worried about the heavy-handedness. Despite the split, media tone was procedural: these are the positions; here is the process.
In 2019-2020, Unizo showed how competition and rules interact. H.I.S. opened this battle with an unsolicited bid to which the board said, “too low,” and the stock vaulted above TOB price, signaling a fight. Unizo then ran a white-knight search process wrapped in an employee-first covenant (with an employee buyout style trust and governance commitments). Multiple sponsors circled. Fortress surfaced with a higher friendly bid; activists pressed for a clean auction; Lone Star ultimately tabled an even higher, all-cash offer and accepted the employee covenant. Shareholders tendered and Unizo moved toward delisting. Public perception evolved from “audacious outsider vs. defensive management” to a straightforward auction narrative: who’s paying most, whose financing is clean, and whether the covenants are genuinely meant to protect employees or merely entrench managers. On the tape, the shares went near vertical as the clearing price reset with the entrance of each new participant.
In 2021, SBI launched a tender to lift its stake and effectively bring Shinsei into its group, arguing for synergy across securities, banking, and fintech. Shinsei’s board explored a poison pill and readied a shareholder vote. However, under intense scrutiny of necessity, proportionality, price, process, and alternatives, the defense was withdrawn. The TOB proceeded and SBI secured control, refreshed governance, and laid out steps to rationalize capital and address the return of legacy public funds. The key was the choreography: announce, committee review, disclosures, proposed defense, shareholder decision, closing, and governance reset. It proved the system can handle a domestic, financially driven hostile bid without drama.
With METI’s recent takeover guidelines and settled case law, contested deals are becoming procedural exercises. Independent committees, opinion reports, fair-price tests, and clockwork timetables form the spine. The general principle is that shareholders decide, whether that is to permit a poison pill, to endorse a white knight, or to tender into a higher bid. Hostile or unsolicited offers remain less common than in the U.S. or U.K., but the negative stigma has largely faded. Now that the rules are set and trusted, expect more Soft99-style contests, fewer morality plays, and more cleanly run auctions where the best price and executable plan win.
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