A Tokyo court has blocked Toho Holdings’ attempt to use a “poison pill” takeover defence against activist investor 3D Investment Partners, in a closely watched case over corporate takeover rules in Japan.
The Tokyo District Court on Friday granted an injunction preventing the Japanese drug wholesaler from issuing warrants that would dilute 3D Investment Partners’ stake if the investment fund increased its ownership above 24%.
3D Investment Partners, based in Singapore, is Toho Holdings’ largest shareholder and has sought to raise its stake to 27%. Toho argued that such a holding could give the fund significant influence over the company’s management.
The court ruling could make it more difficult for Japanese companies to use poison pills against activist investors. Such measures are designed to dilute the holdings of targeted shareholders and discourage them from increasing their stakes.
Toho said it plans to file an objection to the injunction.
The case has attracted attention as shareholder activism continues to increase in Japan. Critics of broader poison-pill use argue that such measures could protect company management from activist pressure, while companies say they can help prevent investors from gaining excessive influence.
Toho’s poison-pill proposal received 54.7% shareholder support at its annual general meeting in June, meeting the threshold required for the measure to take effect.
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