JAPAN Trends and Developments Contributed by: Yo Ota and Bonso Morimoto, Nishimura & Asahi
Overall Landscape Regarding Activists’ Campaigns in the Japanese Market
or management buyouts (MBOs). In such cases, after publicly announcing these M&A transactions, they initiate to acquire stakes in target companies and launch public campaigns demanding more favourable terms. Once such favourable terms are secured, they exit their positions. With respect to M&A activism, it should be noted that the demands of activist share- holders pursuing short-term profits may conflict with the common interests of general shareholders seek- ing to enhance corporate value over the medium- to long-term. Recent Notable Cases Regarding Unsolicited Takeover Bids As reported in detail in the 2024 edition of this guide, since the publication in August 2023 of the Guide- lines for Corporate Takeovers (the “Guidelines”) by the Ministry of Economy, Trade and Industry (METI), unsolicited takeover offers for Japanese listed com- panies have become increasingly common. From the second half of 2024 through the first half of 2025, several notable unsolicited takeover proposals have been made in the Japanese market; brief summaries of some of these cases are provided below. Seven & I v Alimentation Couche-Tard In August 2024, Alimentation Couche-Tard, Inc (ACT), a Canadian multinational operating one of the world’s largest convenience store networks, made a non- binding takeover offer to Seven & I Holdings Co, Ltd (“Seven & I”), the largest convenience store operator in Japan, to acquire all issued and outstanding shares of Seven & I at a price of USD14.86 per share (approxi- mately JPY7 trillion in total). Upon receiving the takeo- ver proposal, Seven & I established a special commit- tee composed solely of independent outside directors to review the proposal. After the deep consideration of the proposal, Seven & I publicly announced its view that the proposal undervalued its intrinsic corporate value and failed to present any effective measures to address competition law issues under US antitrust regulations. Amidst ongoing constructive dialogue between Seven & I and ACT, on 6 March 2025, Seven & I announced newly established measures to enhance its corporate value, which primarily included:
In recent years, activist campaigns driven by both domestic and foreign shareholders have become very frequent in the Japanese market. According to articles by Bloomberg, Japan now ranks second in the world for activist activity, after the United States. In fact, the number of Japanese companies with publicly dis- closed activist stakes is currently at an all-time high. This trend is illustrated by shareholder proposals – one of the standard forms of activist campaigns. The number of such proposals in the Japanese market reached a record high in 2024, marking the third con- secutive year of record-breaking activity. Additionally, the total number is expected to reach a new record high in 2025. Major reasons for the increasing number of shareholder proposals are: • the record-breaking weakness of the yen, which has made Japanese companies appear underval- ued and accessible to foreign investors; and • the growing likelihood of shareholder proposals obtaining general shareholder support, due to the Tokyo Stock Exchange’s recent emphasis on capi- tal efficiency, the tightening of proxy voting policies embraced by institutional investors, and the reduc- tion of cross-held shares ( mochiai ). Traditionally, activist shareholders have demanded that target companies: • increase dividends or buy back shares; and/or • address governance concerns, mainly by propos- ing the appointment of outside directors designat- ed by activist shareholders. Moreover, M&A activism has recently become increas- ingly active in the Japanese market. Activist hedge funds often require target companies to sell or divest unprofitable business divisions or subsidiaries in order to improve overall capital efficiency and reorganise their business portfolios. In the Japanese market, a characteristic feature is the frequent occurrence of cases in which the separation of real estate business- es is advocated. As another example of such type of campaign, some investors invest in listed companies that are the target or a party to M&A transactions, particularly in connection with tender offer bids (TOBs)
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