Top papermaker Oji Paper Co.’s public tender offer for Hokuetsu Paper Mills Ltd. ended in failure Monday, as less than 5 percent of the shareholders had applied for the offer, an Oji Paper executive said.

Monday was the application deadline for Oji’s offer of 800 yen per share.

“It appeared that (the ratio of applicants) didn’t reach even 5 percent,” the executive said on condition of not being named.

Oji President Kazuhisa Shinoda said last week his company would be able to acquire at most only about 30 percent of outstanding Hokuetsu shares, against its target of more than 50 percent.

Hokuetsu, sixth in the business in Japan, is now likely to decide not to implement a poison pill defense.

Its planned countermeasures would have involved issuing equity warrants to all its existing shareholders to dilute Oji’s voting rights, a step intended to make it difficult for Oji to take control of the firm.

Last month, an independent panel gave Hokuetsu the go-ahead to proceed with the measure should Oji’s hostile takeover become a likelihood.

With Oji’s takeover attempt ending unsuccessfully, Hokuetsu may ally with Nippon Paper Group Inc., the holding company of Japan’s No. 2 papermaker, Nippon Paper Industries Co., in another move to counter Oji.

Last week, Nippon Paper said it plans to propose joint production of paper at each other’s factories.

After Oji launched its tender offer Aug. 2,, Hokuetsu allocated Mitsubishi Corp. 50 million new shares Aug. 7, making the trading house its largest shareholder with a stake of 24.4 percent in terms of voting rights.

Nippon Paper, in an effort to block Oji’s bid for Hokuetsu, had taken an 8.85 percent stake in Hokuetsu as of Aug. 8.

Other shareholders, including Daishi Bank and Hokuetsu Bank, each with 2 percent stakes, refused to sell their shares to Oji.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.