A fund backed by Japan’s most prominent activist investor said it will launch on Tuesday an up to $235 million takeover bid for Toshiba Machine Co Ltd, even though the former Toshiba Corp unit has threatened to implement defense measures.
Hostile bids are rare in Japan but have been increasing as the government promotes corporate governance reform to make management more accountable to investors.
City Index Eleventh Co, backed by veteran activist investor Yoshiaki Murakami, said it would offer 3,456 yen per Toshiba Machine share to buy up to 43.82% of the molding machine maker, spending up to 25.9 billion yen ($235 million).
The offer price represents an 11% premium over Toshiba Machine’s close on Friday, when the company revealed the Murakami fund group’s buyout plans. The shares plunged 9% on Tuesday after shooting up 19% on Monday.
Toshiba Machine late on Friday said it could adopt poison-pill measures to fend off acquisition attempts by diluting the holdings of unwanted suitors.
It added that the planned takeover bid could potentially hurt the maximization of its corporate value and shareholders’ interests.
A Toshiba Machine spokesman said on Tuesday the firm is examining the tender offer.
City Index Eleventh in a statement said poison pill measures would buck corporate governance progress in Japan and have a significantly negative impact on market participants.
Murakami-related funds currently hold a combined 11.49% of Toshiba Machine’s total voting rights.
A former bureaucrat, Murakami famously led a fund targeting Japanese companies and pushing for greater shareholder returns until he was convicted of insider trading in 2007. He has since resurfaced as an investor, working with his daughter.
Toshiba Corp holds less than 3% of Toshiba Machine, having sold the bulk of its stake during a management crisis in 2017.