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Mon, Jun 25, 2007 - Page 10 News List

Japan's Bull-Dog Sauce uses `poison pill'


Japan's Bull-Dog Sauce Co yesterday approved of a defense measure to ward off an unwanted takeover bid by Steel Partners Japan Strategic Fund (Offshore) LP, raising the ante in the battle to fend off the foreign fund.

Despite strong opposition from the Steel Partners' Japan arm, which holds the largest 10.15 percent stake in the firm, the iconic Japanese sauce maker won more than two-thirds of shareholders' votes to issue new shares as a defense measure.

The new shares, aimed to dilute the US fund's stake, will be allowed for its existing shareholders to buy, except Steel Partners.

With the Japanese company's intentions clear, a decision to be made by the Tokyo District Court will now prove crucial in the buyout battle.

The fund, headed by financier Warren Lichtenstein, took its fight to court earlier this month, seeking an injunction to bar Bull-Dog from activating the "poison pill" defense.

Steel Partners argued the measures are discriminatory and violate Japanese law.

After yesterday's shareholders' meeting, Lichtenstein immediately released a comment, saying: "We are disappointed that the proposed stock acquisition rights [SARs] have been approved."

"We believe this anti-takeover measure will materially harm the company's value," he said in the statement. "Such a scheme, if allowed to be carried out, would be detrimental to the legal framework of corporate Japan."

Steel Partners "plans to continue to seek to block the issuance of the SARs through legal action," the statement said.

Steel Partners' Japan unit hiked its tender offer price for the Japanese sauce maker to ?1,700 (US$13.72) per share from ?1,584 and extended the term of the bid until Aug. 10, from Thursday.

Lichtenstein, who faced a media scrum when he held his first press conference in Japan earlier this month, said his offer was a "win-win opportunity" for investors, the company and its employees.

He also accused Bull-Dog's management of failing in its duty to shareholders.

Many companies have been adopting poison pill-style takeover bids in Japan, where foreign hostile takeover bids are still rare and buyout funds have been traditionally viewed as corporate vultures.

Steel Partners has also sought a controlling stake in Sapporo Holdings Ltd, Japan's third-largest beermaker, but the Japanese brewer has also so far shunned its advances.

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