Steel Partners after 66.6% if Sapporo drops its defenses

Kyodo News

Steel Partners Japan Strategic Fund (Offshore) L.P. said Thursday it has asked for talks with Sapporo Holdings Ltd. to have it drop its defensive stance so the U.S. investment firm can acquire a 66.6 percent stake in the brewery in terms of voting rights.

Steel Partners, Sapporo’s biggest shareholder with 17.52 percent of its outstanding shares, said it wants to expand the stake to enhance the value of the Tokyo-based firm.

An official at Steel Partners said the fund “regards (Sapporo) as an attractive investment destination and has no intention of taking management control.”

Sapporo Holdings meanwhile said it will start thinking about activating its takeover defenses.

Steel Partners plans to raise its stake in Sapporo in a public tender offer expected to value the shares at around 825 yen each, the proposal said.

Sapporo, listed on the first section of the Tokyo Stock Exchange, closed the day’s trading at 791 yen, up 2 yen, or 0.25 percent, from the previous day.

In late January, Steel Partners called on Sapporo to abandon a package of measures the brewer has adopted to defend itself from a hostile takeover, saying the antitakeover program was merely approved by the Sapporo board of directors.

Sapporo should ask its shareholders whether they support the package and should abandon it if they disapprove at their general meeting slated for March 29, according to Steel Partners.

Industry sources have said that Sapporo Holdings will probably reject Steel Partners’ friendly request to drop its takeover defenses.

But they also said the latest move could lead to the realignment of the beer industry if Sapporo Holdings decides to pursue an alliance with other companies after rejecting Steel Partners.

Sapporo Holdings adopted defensive measures last February out of concern that Steel Partners, known for its aggressive investment strategy, would attempt a takeover.

Steel Partners launched a hostile bid for instant-noodle maker Myojo Foods Co. in October, but had to give up after Nissin Food Products Co. rescued it with a white knight bid.