Takeover defense is one of the criteria that companies have improved since introduction of the Corporate Governance Code in June 2015. The following table shows that comparison of about 1,800 Japanese companies between March 2018 and February 2020.
For the period from March 2018 to February 2020, the number of companies that have no takeover defense provision increased 36 from 1,501 to 1,537 (of the companies tracked). The % rose from 83.6% to 87.4%. We hope that an increasing number of companies will remove the provision at their AGM in June 2020. However, we should note that some companies that show ‘No’ takeover defense provision could have such a provision triggered given certain conditions (“Considering the corporate value and the interest of shareholders of the company, we will take appropriate actions.” [excerpt from Corporate Governance Report of Nintendo]). We should keep it in mind that these companies have prepared a defense system in that case. Such companies are included in the column of ‘No’ takeover defense in the table above. As a result, we should take into account how a company considers takeover defense on an individual basis.
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Aki Matsumoto, CFA