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Sat, Aug 25, 2007 - Page 10 News List

US investment fund accepts defeat in Bull-Dog Sauce bid

AFP , TOKYO

A US investment fund admitted defeat yesterday in its closely watched attempt to take over Japan's Bull-Dog Sauce Co, which carried out controversial defense measures.

The bid, which set off a legal battle that went all the way to Japan's top court, had been seen as a key test for foreign funds fighting Japanese investors in a country where hostile takeovers are rare.

Steel Partners, which had hoped to take 100 percent of the iconic saucemaker common in Japanese kitchens, wound up with only a 4.44 percent stake -- even less than the 10.52 percent it had before launching the takeover bid in May.

Steel Partners said Bull-Dog shareholders had offered to sell it a total 1,318,456 shares -- or a 1.89 percent stake -- of the shares in a tender offer that expired on Thursday.

Steel Partners said it spent "several billion yen" on the failed takeover bid.

"The fund will carefully investigate and analyze the impact that this burden has to its business operation and value and decide its course of action towards the company as a shareholder," it said in a Japanese-language statement.

Bull-Dog Sauce was the first Japanese company to carry out threats of a "poison pill" -- issuing new shares that cannot be bought by the company making the takeover bid, hence diluting the shareholding of the undesired suitor.

Steel Partners -- whose chief Warren Lichtenstein had said he wanted to "educate" Japanese managers -- went to court, contending the poison pill was illegal as it unfairly discriminated against a particular shareholder.

But the Supreme Court rejected Steel Partners' case, saying that shareholders had the right to reject a hostile takeover bid.

Steel Partners had initially offered ¥1,584 (US$13.62) per share and later raised the offer to ¥1,700, before lowering it to ¥425 following the court decision.

Foreign takeover bids are rare in Japan, where buyout funds have been traditionally viewed as corporate vultures.

Steel Partners also made a hostile takeover attempt last year for Japanese noodle maker Myojo Foods.

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