Introduction
In recent years, Japan’s capital markets and market for corporate control have undergone significant transformation. Against the backdrop of initiatives such as the Tokyo Stock Exchange’s March 31, 2023 request that companies listed on the Prime Market or Standard Market “take action to implement management that is conscious of the cost of capital and stock price,” as well as broader corporate governance reforms, investment activity and shareholder proposals by both domestic and foreign activist investors have increased. In addition, since the Ministry of Economy, Trade and Industry (“METI”) published the Guidelines for Corporate Takeovers: Enhancing Corporate Value and Securing Shareholders’ Interests (the “Guidelines”) on August 31, 2023, there has been an increase in transactions to take listed companies private and in unsolicited acquisition proposals for listed companies. As a result, Japan’s market for corporate control has entered a new stage of development.
In response to these changes, discussions have intensified in recent years regarding the development and appropriate design of the rules governing Japan’s capital markets and market for corporate control. This newsletter highlights three major recent developments in these areas: (i) the reform of the tender offer and large shareholding reporting regimes, (ii) the publication of the “Key Points” and Q&A relating to the Guidelines, and (iii) recent policy and regulatory developments concerning shareholder activism.
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Author:
Takahide Fujii (Nagashima Ohno & Tsunematsu, Partner)