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Bull Dog Shareholders Approve Anti-Takeover Measures

June 24, 2007
By Ken Worsley


Earlier this afternoon, the shareholders of Bull Dog voted to approve anti-takeover measures that had been proposed by the company’s senior management in order to thwart an unwanted takeover bid by U.S. hedge fund Steel Partners.

Steel Partners has asked the Tokyo District Court to issue an injunction against Steel Partners, on the grounds that the anti-takeover plan would violate the principle that all shareholders should be treated equally. Bull-Dog’s plan involves issuing 3 equity warrants per share and not allowing Steel Partners to exercise its warrants. Instead, by buying them back for 396 yen per warrant, Bull Dog would reduce Steel Partner’s holding from about 10 percent to less than 3 percent.

A decision from the Tokyo District Court is expected by the end of this week. If the court decides that Bull Dog can proceed with its anti-takeover plan, Steel Partners will have until July 4 to give up its tender offer. If that does not happen, Bull Dog will issue the equity warrants on July 11.

Although shareholders supported Bull Dog’s management with the vote, management came under fire from several participants. One man pointed out the obvious lack in risk management skills and asserted that the company could have paid higher dividends to investors instead of spending money implementing anti-takeover measures that should have already been in place.

One shareholder, in a show of support for the company and an attempt to get in a tired old dig at foreigners, said that Steel Partners’ aggressive move to take over the company was akin to walking into a house with shoes on.

It’s difficult to evaluate what sort of precedent this may set until the court returns its verdict, but the shareholder sentiment is not encouraging.

Filed Under Barbarians at the Gate, M&A, Steel Partners 

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Comments

6 Responses to “Bull Dog Shareholders Approve Anti-Takeover Measures”

  1. Phil on June 24th, 2007 7:21 pm

    Not encouraging? To see these people stand up for themselves? What business does SP have with their company? None whatsoever.

  2. Ken Worsley on June 25th, 2007 12:11 am

    Phil, the stock is public. Anyone is free to buy it.

  3. Marc on June 25th, 2007 2:51 pm

    Come on Phil…you have to be kidding with that comment. It’s a publicly traded company. They can’t pick or choose who gets to buy in. Are Japanese companies really so weak and helpless that they need the government to allow them to water down the holdings of individual or group shareholders just because they’re scared or don’t like them?

  4. Garrett on June 25th, 2007 4:12 pm

    Why is there this assumption that this is necessarily a hostile act (in the broad sense)?
    Steel Partners is not trying to destroy Bull Dog, they’re trying to make money. How is that any different from what is happening now? It’s saddening to see other shareholders blindly rally around the management instead of doing what’s best for themselves and the company.

  5. Ken Worsley on June 25th, 2007 4:44 pm

    What is the broad sense of hostile? Is there a narrow sense of hostile? What would Abe say? “There is no proof that Steel Partners ever actually stole shares from shareholders at gunpoint. Well, just once…but that guy was punished…and…”

    But seriously, it is hostile in the sense that it’s a bid for all existing shares in the company. It’s not a bid for a seat on the board, or even a controlling stake; it’s a bid for lock, stock and barrel. I’m not sure why no one in the media has yet pointed out the impossibility of that happening; board members who own shares are very unlikely to give theirs up.

    The irony being that of course Steel Partners wants to maximize shareholder value and see the price go up over the next, say, 5 to 7 years. If I honestly believed in their plan and thought they could pull it off, then my best play as a shareholder is to stay pat. Why would I sell shares if I thought they would increase in value and make me more money in the future?

  6. Phil on June 26th, 2007 4:37 am

    Come on, this is pure greenmailing. How could they manage the day to day operations of a sauce company? Please…they’ll sell the shares back at a premium and make a ton. The company hasn’t been savvy about their business, but they’ve been overprotected. This is like hunting animals in a cage.

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