Steel Partners all over the news: METI speaks up

June 15, 2007
By Ken Worsley

As we discussed in the most recent edition of BizCast Japan, Steel Partners Japan President Warren Lichtenstein was in Japan earlier this week. In this humble observer’s opinion, he simply shined in front of the cameras before heading off to meet with the senior management of some of the companies that Steel Partners is investing in/trying to take over.

Then things didn’t go so well. During an hour-long meeting in Tokyo on Wednesday, Lichtenstein was quizzed by Bull-Dog President Shoko Ikeda about the intentions behind the fund’s tender offer and also grilled on what would be its business plan for the company should the offer be successful. According to reports, Lichtenstein responded by “asking Ikeda what tender offer price the Japanese firm would be willing to accept.”

After that meeting, Steel Partners filed an injunction to stop Bull-Dog from issuing equity warrants, which would dilute Steel Partners’ share in the company and make a takeover much more difficult. Steel Partners holds that such a move may be illegal, and at his press conference, Lichtenstein stressed that such steps have not been taken before in Japan, and that they are being considered because companies do not understand what Steel Partners is trying to do.

Steel Partners fought back by saying that its “poison pill” measures are not only legal, but appropriate in such a situation.

Then, on Friday, a METI Vice Minister, Takao Kitabata, criticized the investment tactics employed by Steel Partners, claiming that none of its takeover proposals are helping to increase corporate values, and that “poison pill” tactics are fully legal.

We think Steel Partners is going to stay in the news for some time to come, and those companies who adopt poison pill strategies are going to eventually regret it. Or not, given the average age of their senior management.

Filed Under Barbarians at the Gate, Hedge Funds, M&A