By Makiko Yamazaki and Ritsuko Shimizu
TOKYO (Reuters) – Japanese banks have become less reluctant to finance hostile takeovers because new government guidelines on takeovers have removed the taboo on such deals, the new head of Japan's banking lobby said.
The comments by Akihiro Fukutome, head of the Japanese Bankers Association, offer evidence of a sea change in Japan that has helped move it closer to Western-style deals.
“Banks were previously concerned about the reputational risks” of assisting in unsolicited bids, Fukutome said in an interview. “But I think the Ministry of Industry's new procurement guidelines last year have helped reduce psychological obstacles.”
Hostile bids, once rejected because they were seen as detrimental to Japan Inc's collaborative spirit, are still relatively rare, but the frequency is increasing.
Last year, the Ministry of Economy, Trade and Industry (METI) published new M&A guidelines aimed at combating excessive defensive tactics, removing a long-standing stigma around unsolicited bids and spurring corporate acquisitions.
The non-binding guidelines have already led companies such as electric motor maker Nidec and life insurer Dai-ichi Life Holdings to launch hostile takeover bids.
Fukutome, who also heads the main banking arm of Sumitomo Mitsui (NYSE:) Financial Group, said banks should consider unsolicited proposals if a deal would benefit the target company and help improve its long-term value.
“The environment for unsolicited offers is changing and we have seen an increase in these types of deals in our portfolio,” he added.
There have been three hostile takeover proposals in the past 12 months in Japan, including a bid by Brother Industries to thwart a management buyout of Roland DG, LSEG data shows.
Japanese investment bank Daiwa Securities Group has said it is willing to advise a hostile acquirer on the merits of whether the deal would benefit the target company or its industry.
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