[3 Notable TOB Cases You Should Know, Part 2] Fraudulent TOB, Hostile TOB, and a Purchase Price of 1 Yen?
Hello, this is MAFIAcapital!
I've been digging into interesting past TOBs lately due to the recent TOB frenzy, and I'll introduce three of them today.
《A Fraudulent TOB Case to Inflate Stock Prices》
・In 1998, Mr. A purchased approximately 1.29 million shares of Totenko Co., Ltd., and because he exceeded 5% of the outstanding shares, he was required to submit a Large Shareholding Report, but he failed to do so.
・Mr. A continued to purchase more shares, acquiring approximately 5.23 million shares by February 2000, reaching a holding ratio of 20.36%, and finally submitted the Large Shareholding Report.
・However, after the Totenko stock price subsequently fell, Mr. A, despite having no prospect of securing funding, announced to the Tokyo Stock Exchange that he would conduct a TOB for Totenko shares in order to drive up the stock price.
・Later, however, he stated that he would postpone the TOB (suspicious...).
・Based on the above facts, Mr. A was indicted and found guilty of the crime of failing to submit a Large Shareholding Report, the crime of filing a false Large Shareholding Report, and the crime of spreading rumors intended to manipulate the market price of securities through the announcement of a TOB.
・I wonder what this person is doing now...
《A Case of a Hostile TOB That Ultimately Resulted in an Expression of Opposition》
・On January 21, 2020, City Index Eleventh Co., Ltd. (formerly the Murakami Fund) announced that it would commence a TOB for Toshiba Machine without prior notice or contactすると公表しました。
・At its board meeting, Toshiba Machine reserved its opinion on the TOB, stating that there was insufficient information to evaluate it and exercised its right to question City Index.
・Subsequently, after reviewing the proposal based on the information provided in the response report submitted by City Index, and receiving a recommendation from an independent committee composed of three outside directors that it was appropriate to express opposition to the TOB, Toshiba Machine passed a resolution to express opposition to the TOB.
・Regarding the reasons for opposing the TOB, Toshiba Machine argued that City Index had provided no management policy for after the TOB, that it was highly likely to damage corporate value or shareholder interests, and that the TOB ignored the policies implemented by Toshiba Machine and was conducted using coercive methods that disregarded the will of the shareholders.
・Furthermore, Toshiba Machine held an extraordinary general meeting of shareholders to decide on the activation of takeover defense measures as a countermeasure against the large-scale purchasing activity by City Index, which was approved.
・Subsequently, the TOB was withdrawn by City Index.
《A Case Where the Purchase Price for Stock Acquisition Rights Was 1 Yen》
・In April 2022, Tri-Stage, a company specializing in TV mail-order business, announced that it would conduct an MBO in partnership with the PE fund Bain Capital and take the company private.
・Tri-Stage's common stock and stock acquisition rights became the subject of the TOB.
・The TOB price for the common stock was set at 565 yen per share, a 66.67% premium over the closing price of 339 yen on the day before the announcement.
・On the other hand, the price for the stock acquisition rights was set at 1 yen per share (what a huge difference...).
・In other words, the stock acquisition rights were issued to Tri-Stage officers and employees as stock options, and the condition for exercising the rights was that the holder must be a director or employee of the company at the time of exercise, meaning the tender offeror could not exercise them even if they acquired them (so they are worthless).
・That is why they were priced at 1 yen per share.
・Given the above, they are indeed worthless; I wouldn't even want them for 1 yen lol
There are all sorts of TOBs, it's very interesting!
I'd be happy if you gave me a like!!