Following METI's publication of its key points and Q&A, investment funds are split between a preference for the highest price and a focus on enterprise value, while the interpretation of directors' duty of care is sparking debate.
Maruki Tsuyoshi (丸木 強), representative of ストラテジックキャピタル, has criticized Japan's takeover rules as having regressed and strongly criticized the “Key Points and Q&A” published by METI. This article examines how, while the regulatory framework for takeovers is being developed, investors have differing views on the specific interpretation of the guidelines. Among the key points in the publication is the interpretation that directors would not be in breach of their duty of care even if they did not support the highest-priced acquisition proposal, and the response to this interpretation has been the main focus of discussion.
The assumption that shareholders of a target company should, in principle, seek to maximize share value is once again being called into question, while the effectiveness of measures to enhance enterprise value put forward by directors opposing an acquisition proposal is also under discussion. Some market participants point out that the conventional view of whether the highest-priced proposal should be selected could be unsettled depending on how the guidelines are interpreted, and attention is focused on developments in specific cases of application going forward.