NAGOYA (Kyodo) Daido Steel Co. has asked some automakers to buy or increase equity stakes in the specialty steel manufacturer in a bid to ward off potential hostile takeover bids, sources said Tuesday.
The request was made to customers of Daido Steel, including Toyota Motor Corp., Honda Motor Co. and Suzuki Motor Co., the sources said.
Honda has already accepted the request and has recently increased its stake Daido to around 3 percent. Honda held just 0.2 percent of Daido Steel shares as of March 31, 2006.
Daido Steel already has several stable shareholders, holding a combined stake of around 30 percent. But the firm is trying to secure larger stable shareholders to forestall unwanted takeover bids, the sources said.
Of the stable shareholders, Nippon Steel Corp. had a 10.2 percent stake in Daido at the end of March 2006.
The Daido Steel action came after a new system took effect May 1 to allow foreign companies to more easily acquire Japanese firms.
Daido Steel's mainstay specialty steel products are indispensable for automotive engines.
The global steel industry has undergone a large-scale reorganization, where Mittal Steel Co. of the Netherlands, the world's No. 1 steelmaker, acquired Arcelor SA of Luxembourg, No. 2, in 2006.
Fearing the possibility of hostile takeover bids, Daido Steel last year announced plans to introduce defensive measures, including a request for bidders to specify their objectives.