Open-tender regulations should cover stock acquisitions in off-hours trading involving less than one-third of outstanding shares in a company if the buyer intends to eventually obtain more than one-third, Financial Services Minister Tatsuya Ito indicated Wednesday.
He made the remark at a House of Representatives committee meeting on a bill to revise the Securities and Exchange Law in order to expand the coverage of open-tender rules that oblige a buyer to publicly announce a price, a tender period and other details of a massive share buy.
The open-tender regulations are designed to give a wide range of shareholders opportunities to sell shares. An equity stake exceeding one-third carries the right to veto key proposals at a general shareholders' meeting of a company.
Currently, the regulations are applied only to off-market acquisitions of an equity stake exceeding one-third of a company, but financial authorities plan to expand the application to similar deals in off-hours trading as well.
The plan was prompted by Internet firm Livedoor Co.'s surprise massive acquisition of Nippon Broadcasting System Inc. shares through off-hours trading in early February. Because the acquisition was done through off-hours trading, Livedoor was not required to publicly announce details of the deal.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.