Gov’t Questions Motive of Steel Partners’ Buyout Bid for Sapporo

By Kyodo News International, Tokyo

Feb. 20–TOKYO — Industry minister Akira Amari raised doubts Tuesday about whether last week’s proposal by U.S. investment fund Steel Partners to acquire Sapporo Holdings Ltd. was truly intended to enhance the corporate value of the Japanese beer maker.

“The important thing for M&A (mergers and acquisitions) is whether a deal will help boost corporate value (of a target company),” Amari said at a news conference. “The world does not want to see someone who simply sells off (stocks at higher prices) and makes money regardless of whether a target’s corporate value has been raised or not.” Amari said that looking at Steel Partners’ past behavior in Japan, the fund is inevitably seen as a greenmailer, which seeks to generate a large amount of money by amassing a large block of stock of a target company.

“We will closely watch whether the proposal will really lead to boosting corporate value (of Sapporo),” the minister of economy, trade and industry said.

Greenmailing is a corporate acquisition strategy that forces the target company to repurchase the stock at a substantial premium to prevent a takeover.

Steel Partners’ proposal calls for raising its stake in Sapporo, Japan’s third-largest beer company, to 66.6 percent in terms of voting rights from the current 18.6 percent. The U.S. investment fund is already the biggest shareholder in Sapporo.

If the Sapporo board of directors rejects the buyout proposal, it is believed that Steel Partners may launch a hostile takeover bid for the brewer.

Takao Kitabata, vice minister of economy, trade and industry, said Monday his ministry is looking at Steel Partners’ move with interest because it is the first time such a proposal has been filed against a company equipped with a set of measures against takeover bids.

Kitabata voiced concerns that Steel Partners had requested that Sapporo abolish the anti-takeover measures.

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