Makiko Yamazaki and Ritsuko Shimizu
TOKYO (Reuters) – Japanese banks have become less willing to finance hostile takeovers as new government takeover guidelines remove a taboo on such deals, the new head of Japan’s banking lobby said.
The comments by Akihiro Fukutome, head of the Japanese Bankers Association, highlight a sea change in Japan that has helped move it closer to Western-style deal-making.
“In the past, banks were worried about the reputational risks” of helping unwanted tenders, Fukutome said in an interview. “But I believe the new takeover rules adopted last year by the industry ministry have helped reduce the psychological hurdles.”
Hostile offers, once avoided because they were seen as disruptive to Japan Inc’s cooperative spirit, are still relatively rare but are increasing in frequency.
The Ministry of Economy, Trade and Industry (METI) last year published new guidelines on mergers and acquisitions aimed at combating overprotective tactics, eliminating the long-standing stigma against unsolicited bids and encouraging corporate takeovers.
The non-binding rules have already prompted companies such as electric motor maker Nidec and insurer Dai-ichi Life Holdings to file hostile takeover bids.
Fukutome, who also heads the core banking division of financial group Sumitomo Mitsui (NYSE:), said banks should consider unsolicited offers if the deal will benefit the target company and help improve its long-term value.
“The climate for unsolicited offers is changing and we are seeing an increase in the number of such deals in our portfolio,” he added.
There have been three hostile takeover bids in Japan over the past 12 months, including a bid by Brother Industries to block a management buyout of Roland DG, LSEG data shows.
Japanese investment bank Daiwa Securities Group said it is willing to provide substantive advice to a hostile buyer if the deal benefits the target company or its industry.