In my earlier article on M&A, where:
Oji, Japan’s largest paper maker, officially launched a tender offer on Wednesday for sixth-ranked Hokuetsu in a rare hostile takeover deal that could exceed $1.4 billion and would create the world’s fifth-largest paper maker by sales
The interesting part about this proposed acquisition is:

• hostile takeover scenes are not the norm in the Japanese market;

• it demonstrates the blatant lack of corporate governance by the Hokuestu’s board of director by issuing new shares to Mitsubishi Corp ignoring the voting rights of the existing shareholders (1/4 owned by foreigners);

• reflects the use of poison pill as a defence and the attempt to get a white knight to fend off the hostile takeover from Oji Paper

The recent development as reported by Reuters (3/8/06):
There is now a sudden twist of event where Nippon Paper Group Inc, Japan’s second-biggest paper maker, aimed to take up to 10 percent in terms of voting rights after the Hokuetsu’s planned issue next week of new shares worth 30 billion yen to trading house Mitsubishi Corp. Incidentally, the issuance will give Mitsubishi a 24 percent stake in terms of voting rights.Earlier Nippon Paper has already acquired 8.49 percent (# 11.3 billion yen)of Hokuetsu.)  Nippon has appointed Morgan Stanley as its financial adviser on this deal. The participation of Nippon Paper would complicate an already complex takeover battle and put more pressure on Oji to sweeten the terms of its offer..According to analysts:
 

• the action by Nippon Paper is to “realign itself in the paper industry” which is between the top two paper firms. Nippon Paper said it has not discussed a future alliance with Hokuetsu or Mitsubishi but plans to ask them to discuss a tie-up after Hokuetsu’s capital increase and
• the takeovers in the paper industry  would not be as exciting as the paper companies already have been hit by high oil prices and may be unable to benefit from bidding wars, which require financial strength.

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