NIIGATA (Kyodo) Hokuetsu Bank on Friday refused to sell its shares in Hokuetsu Paper Mills Ltd. to Oji Paper Co., according to Oji's president.
"I was told the bank will not alter its policy of taking action in line with Hokuetsu Paper Mills' intentions," President Kazuhisa Shinoda told reporters after his meeting with Hokuetsu Bank President Kuniaki Nozaki in Nagaoka, Niigata Prefecture.
Oji, the pulp and paper industry's leader, started a takeover bid Aug. 2 for Hokuetsu Paper, the No. 6 firm known for its sophisticated technology.
Hokuetsu Bank owns a 2-percent stake in Hokuetsu Paper, as does Niigata-based regional lender Daishi Bank.
Daishi Bank President Kunito Kojima also said no to Oji's request to buy Daishi's shares in a Thursday meeting with Shinoda.
Shinoda's failure to drum up support from Hokuetsu Paper's major shareholders is a serious blow to Oji's attempt to get a majority stake in its rival through an open tender.
During Friday's meeting with Nozaki, Shinoda said Oji's plan would be to let Hokuetsu Paper keep its name and the Nagaoka factory, and the firm's employees would keep their jobs.
Shinoda also pledged to Nozaki that Oji would keep Hokuetsu Paper's headquarters officially registered in Nagaoka, where it was founded. Hokuetsu Paper's head office is now in Tokyo, but it is still registered in the Niigata city.
Shinoda met with Nagaoka Mayor Tamio Mori later in the day in an attempt to muster support for the Hokuetsu bid, Oji officials said.
After the meeting, Mori said he still backed Hokuetsu. He said Shinoda's explanation did not remove the city's concerns that Oji might close the Hokuetsu plant at some time in the future.