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Steel Partners Loses Bid to Block Poison Pill at Japanese Sauce Maker

Steel Partners, which has been leading hostile takeover moves in Japan, has lost its court appeal to block a poison pill defense by Japanese sauce maker Bull-Dog.

The company's board on June 24 approved a plan to issue equity warrants to dilute the hedge fund's ownership stake and thwart the USD 260 million takeover. The Tokyo High Court on has agreed that Steel Partners was an "abusive buyer" motivated by "the view of disposing of its target company assets and must be seen as solely concerned with pursuing its own profit."

The US-based hedge fund Steel Partners has taken ownership stakes in some 30 Japanese companies, including some of Japan's flagship food companies, using its shares to press for huge increases in dividends and profiting from increases in share value following takeover pressures (a practice called "greenmail" in Japan).

The case - which the hedge fund may attempt to appeal to the Supreme Court - is being closely watched by private equity funds, which have been aggressively stepping up their lobbying efforts in Japan.