The corporate governance panel of the Liberal Democratic Party issued recommendations Thursday for reforming rules on corporate takeovers, including extending the period for open bidding.

The current length for open bidding, in which a bidder buys shares of a targeted company for a specific price open to the public, now ranges from 20 to 60 days.

A longer period would give the targeted company more chances to take countermeasures and negotiate with the bidder, the panel said.

Requests for reforms on takeover rules surged after a high-profile battle between Internet services company Livedoor Co. and Fuji Television Network Inc. for control of Nippon Broadcasting System Inc. earlier this year.

The recommendations also called for allowing a bidder to withdraw an open bid or lower a bid price when the targeted company takes countermeasures, including conversion of equity warrants into shares for shareholders other than the bidder.

The recommendations also urge the government to issue an ordinance requiring companies to specify takeover defenses in their financial reports.

The panel wants to draft a bill on the reforms and send it to the Diet next year.

U.S. slams M&A delay

The United States expressed dissatisfaction Wednesday that the implementation of relaxed mergers and acquisitions rules under Japan's new corporate law has been delayed.

The U.S. claimed that moves aimed at giving Japanese companies more time to prepare for the new system is "unnecessary and unhelpful," according to an annual investment report compiled by the two governments. "It would postpone the beneficial effects of the new merger technique on the Japanese economy," the U.S. said in the 2005 U.S.-Japan Investment Initiative report.

Washington also warned against efforts here to introduce excessive defensive measures to counter takeovers.

It sought improved corporate governance regimes in the country, in connection with changes to companies' defense tactics "to strengthen shareholder rights and prevent the abuse of such measures."

Japan's new corporate law, which was enacted late last month, will take effect in 2006. Relaxed M&A provisions, however, will be put into force in 2007, thereby allowing Japanese firms to develop defenses against hostile takeover bids.

A number of Japanese companies began introducing defensive measures after a high-profile battle over a radio station between Internet portal operator Livedoor Co. and television broadcaster Fuji Television Network Inc. earlier this year.