Japanese banker Caught In Dilemma Over Proposed Takeover Of Hokuetsu By Oji Paper

Continued from my earlier article on the hostile takeover by Oji Paper;
Reported in The Star (3/8/06)
 

“A hostile takeover battle between two Japanese paper makers is causing headaches for the country’s second biggest bank,Mizuho Financial Group,which has ties to both companies as both a primary lender and shareholder.”

To add more headaches,  the banker also owns shares in Nippon Paper Group Inc,another client and Japan’s second biggest paper maker which planned to buy a stake in Hokuetsu to block Oji’s takeover bid. 

What should be noted that traditionally,Japanese companies have been relying on a single lender for the bulk of their financing,and have often cemented ties to their main bank through an exchange of shares.
In this case,Mizuho Corporate Bank,one of two major Mizuho subsidiaries,owns 2.7% of Oji,Japan’s biggest paper maker and the bidder in the takeover fight. It also owns 2.9% of Hokuetsu,Oji’s smaller target. 

Although such links have weakened in recent years,the three top-tier “mega banks” – Mitsubishi UFJ Financial Group,Mizuho and Sumitomo Mitsui Financial Group – still own shares worth 16.5 trillion yen (US$144bil),according to UBS.
   
Japanese culture normally does not have much of hostile buyout attempts. This is normally been a corporate merger from quiet backroom dealing among executives. 

• Nippon Paper Entering The Takeover Battle Between Aggressor Oji Paper And Hokuetsu
• Hokuetsu Paper Mill Prepares Poison-Pill Defence Against Its Aggressor Oji Paper
• Japanese Banks
• M&A:What is the difference between a merger and a takeover?
• Mergers &Acquisitions:Potential Takeover Target
• Carlyle’s proposed US$375 million (RM1.38
• HCA Takeover Bid A US Record Of US$32.7 Billion (Including debts)