含羞草社区

Following the publication of the Ministry of Economy, Trade and Industry’s unsolicited takeover guidelines in 2023, two takeover bids have recently garnered considerable attention among M&A practitioners in Japan. They are Alimentation Couche-a (ACT) proposal for a takeover bid for Seven & i Holdings and NIDEC’s tender offer for Makino. This article focuses on a recent court ruling regarding Makino’s takeover defence plan in the latter case. Incidentally, ACT recently withdrew its proposal “due to a lack of constructive engagement by Seven & i”, according to ACT’s release on 16 July 2025.

In December 2024, NIDEC announced its intention to make a takeover bid for Makino starting in early April 2025, without any prior consultation (both companies are listed on the Tokyo Stock Exchange’s Prime Market). After the announcement, both parties engaged in discussion and Makino, in order to explore the possibility of identifying a “white knight”, asked that the commencement of the tender offer be delayed, but NIDEC went ahead with its tender offer as originally scheduled.

In response, Makino announced a takeover defence plan. The main point of the plan was that if NIDEC did not delay commencement of its tender offer (or alternatively extend the offer period) by about one month, and if its shareholders approved the plan at its annual general meeting of shareholders scheduled for June, it would make a shareholder allotment of stock subscription rights. NIDEC and its related parties would then be denied the ability to exercise those rights.

Following Makino’s announcement, NIDEC filed an application with the Tokyo District Court for a provisional disposition to stay the plan. However, the court rejected the application. It appears the court gave weight to Makino’s argument that it had proposed delaying commencement of NIDEC’s tender offer until its shareholders had the opportunity to consider the plan, and that the plan was not definite but would be abandoned if its shareholders did not confirm it.

NIDEC did not appeal the ruling made on 7 May, and then withdrew its tender offer on 9 May. Given there was no guarantee that the court’s ruling would change on appeal, it seems that NIDEC gave priority to exploring other opportunities to acquire machine tool manufacturers such as Makino.

Under Japan’s tender offer regime, there are limited grounds for withdrawing a tender offer, but one ground is the target company’s allotment of shares or share subscription rights (where made without requiring additional payment), and NIDEC withdrew its tender offer based on this ground. As a result, we may see listed companies that had been increasingly abandoning takeover defence plans reverse course in the face of unsolicited takeovers. If this occurs, we may also see acquirers using this ground for withdrawing tender offers.

An allotment of stock subscription rights to the shareholders of a listed company can proceed without a shareholder meeting’s approval as long as it meets with board approval. A takeover defence plan can proceed based solely on a board resolution. However, an issuance that involves a discriminatory term to the effect that the acquirer cannot exercise its stock subscription rights is not a straightforward shareholder allotment.

In 2007, the Supreme Court ruled that such a discriminatory term is to some extent acceptable. There is a view that, as stock subscription rights are not shares but rather creditor rights, a level of discrimination is permissible. However, in the context of a takeover defence, such a term substantively discriminates against a specific shareholder, and as such raises doubts about whether such plans can simply proceed by way of shareholder allotment.

In Makino’s case, it seems that the court gave weight to the fact that Makino asked NIDEC to delay so that it could confirm its shareholders’ intent to endorse the takeover defence plan and did not introduce an outright defence plan. Nonetheless, discriminatory treatment of an acquirer in a shareholder allotment of stock subscription rights does involve a question of the relative weight that should be attached to the interests of all relevant stakeholders, and this is arguably a policy question that should be addressed by parliament rather than the courts, especially given the infrequent and small number of court cases such as Makino’s in Japan.

After it succeeded in defending against NIDEC’s takeover bid, Makino decided to go private in collaboration with a private equity fund’s takeover bid. Up until the end of June 2025, Makino posted about JPY2.3 billion (USD15.6 million) in tender offer bid-related costs, a significant outlay given Makino’s consolidated sales were about JPY234 billion, about one-tenth of that of NIDEC. Future hostile takeover bids may entail similar costs for target companies.

Akimoto Kawamura is a senior partner and Christopher Hodgens is a partner at Atsumi & Sakai in Tokyo

Atsumi & Sakai
Fukoku Seimei Bldg
2-2-2 Uchisaiwaicho
Chiyoda-ku Tokyo 100-0011 Japan

Contact details:
T: +81 (0)3 5501 2111
F: +81 (0)3 5501 2211
E: akimoto.kawamura@aplaw.jp / christopher.hodgens@aplaw.jp