Nippon Fine Chemical Rejects MBO Proposal

Tokyo, Oct. 30 (Jiji Press)–Nippon Fine Chemical Co. said Tuesday it has rejected a management buyout proposal by U.S. investment fund Dalton Investments LLC.

The Japanese chemical maker said in a statement submitted to its top shareholder Dalton that the company cannot see any benefit in the MBO.

In April, Dalton, which holds 14 pct of Nippon Fine Chemical’s outstanding shares, called for the MBO.

Dalton also called on the company to sell its real estate operations and concentrate its business resources on chemical products operations.

Nippon Fine Chemical responded by saying that it would be difficult for the company to secure skilled workers if it goes private through an MBO.

In addition, the company said the MBO is not supported by its employees and major business partners.

Regarding its real estate operations, the company noted it is making profits and there is no reason to sell off the business.

The company also said in a statement that it will buy back up to one million of its shares, some 3.8 pct of total outstanding shares, by June next year in an effort to return profits to its shareholders.END

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