Proxy Fight Looms in Nippon Broadcasting Takeover Saga

Strategic Insights -

The battle for control of Nippon Broadcasting System Inc. is escalating into a potential proxy fight, with Fuji Television Network Inc. holding 36.47% of outstanding shares and Livedoor Co. holding more than 45% of voting rights. The Tokyo District Court's decision on Livedoor's temporary injunction to stop Nippon Broadcasting from issuing equity warrants to Fuji TV will determine the fate of this takeover struggle. A proxy fight could greatly impact the way mergers and acquisitions are conducted in Japan, as shareholders would vote for a plan to boost corporate value.

Key Takeaways:

  • Fuji TV has secured 36.47% of outstanding shares in Nippon Broadcasting through its tender offer.
  • Livedoor holds more than 45% of voting rights in Nippon Broadcasting, but may become a minority shareholder if Fuji TV exercises equity warrants.
  • A proxy fight between Fuji TV and Livedoor could force both suitors to outline plans to boost corporate value in a manner that benefits general shareholders.
  • A proxy fight could greatly impact the way mergers and acquisitions are conducted in Japan, with a precedent set by the 2002 Hewlett-Packard proxy fight.
  • The fusion of new technology and democracy could change the M&A landscape in Japan.
  • The Hewlett-Packard proxy fight in 2002 was the largest in the US at the time, with both sides spending over 100 million dollars on campaigns.
  • A majority of Hewlett-Packard's shareholders were institutional investors, which forced the company to present persuasive plans for increasing value.

Statistics:

  • 36.47%: the percentage of outstanding shares in Nippon Broadcasting held by Fuji TV.
  • 45%: the percentage of voting rights in Nippon Broadcasting held by Livedoor.
  • 100 million dollars: the amount spent by Heinrich and Carly Fiorina on Hewlett-Packard proxy fight in 2002.
  • 57%: the percentage of Hewlett-Packard shares held by institutional investors in 2002.
  • 25%: the percentage of Hewlett-Packard shares held by individual investors in 2002.
  • 18%: the percentage of Hewlett-Packard shares held by the founding family and affiliated foundation in 2002.

Sources:

  • Tokyo March 9 Asia Pulse
  • Fuji Television Network Inc. (TSE:4676)
  • Livedoor Co. (TSE:4753)