The Tokyo Stock Exchange will implement Wednesday new rules concerning the use of shark repellent strategies employed by firms seeking to avoid a hostile take-over bid.
Prior to exercising any shark repellent such as a poison pill or golden shares, listed targeted companies will now be required to get the stock exchange’s nod of approval. A Mizuho Corporate Bank spokesman said the TSE will independently 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 seeking to employ a poison pill strategy of issuing golden shares will be required to receive approval by an independent external party and the new rules will ban golden shareholders from vetoing a firms major proposals or excuse a majority of directors.
Mizuho spokesman said targeted firms risk de-listing by the TSE within six months should they opt to issue golden shares if their anti-takeover proposals are not TSE approved.
The businesses listed under a holding company structure that is listed will be treated as such when issuing golden shares.