The Tokyo Stock Exchange will implement new rules concerning the use of measures taken by a corporation to discourage an unwanted takeover attempt by firms seeking to avoid a hostile take-over bid.
Before using strategies to deter a take-over, such as making the stocks less attractive by allowing shareholders to buy more shares at a discount or allowing stockholders to buy the acquirers shares at a discount after the merger, companys will have to get a nod from the TSE.
The TSE will evaluate the anti-takeover strategies and trigger conditions in order to protect the rights of investors, which would take two to three weeks for the review process to be complete.
Targeted firms wanting to use these strategies will be required to receive approval by an independent external party and the new rules will ban golden shareholders those shareholders that have veto power over changes to the companys charter – from vetoing a firms major proposals or excuse a majority of directors.
Targeted firms risk de-listing by the TSE within six months should they opt to issue golden shares without TSE approval.
The businesses listed under a holding company structure that is listed will be treated as such when issuing golden shares.