Sapporo’s takeover fears not supported by facts, Steel says

by Hiroko Nakata

U.S. hedge fund Steel Partners Japan denied Wednesday that its proposal to take over Sapporo Breweries Ltd., the nation’s third-largest brewery, would seriously harm shareholder interests, as claimed last week by a Sapporo Holdings Ltd. panel.

In a response sent Wednesday to Sapporo, Steel Partners Japan Strategic Fund, the U.S. fund’s Japan unit, said the panel’s opposition to the acquisition proposal is “not supported by facts.”

“We believe that the biggest risk of damage to the company’s corporate value and harm to the common interests of its shareholders and stakeholders stems not from SPJSF or the proposed acquisition, but from the continued path the committee and board is currently following, as opposed to allowing shareholders to decide for themselves whether to accept or reject SPJSF’s offer,” Warren Lichtenstein, managing partner of Steel Partners Japan, wrote in the letter.

The fund said it voluntarily responded to more than 45 questions from Sapporo to provide information, in response to the panel’s criticism last week that Steel Partners did not sufficiently detail how it intends to run Sapporo and turn around its business after the proposed acquisition.

The fund also reiterated its belief that Sapporo shareholders should have the right to choose for themselves whether to accept the fund’s proposed tender offer.

Steel Partners’ rebuttal followed the judgment made by Sapporo’s panel, which consists of a lawyer and other outside experts. Sapporo asked it for advice Jan. 8 about whether it should launch takeover defenses against Steel Partners.

Steel Partners is Sapporo’s largest shareholder, with 17.52 percent in outstanding shares.

Last week’s judgment by the panel is likely to lead Sapporo to formally turn down the buyout proposal by Steel Partners Japan.

Sapporo’s board will announce its decision, based on the panel’s judgment, by March 5. The final decision will be made at a shareholders’ meeting in late March.