JAPAN Trends and Developments Contributed by: Yo Ota and Bonso Morimoto, Nishimura & Asahi
Revision of Rules on MBOs and Going-Private Transactions by Controlling Shareholders On 22 July 2025, the Tokyo Stock Exchange revised the rules on MBOs and going-private transactions by controlling shareholders in order to protect the com- mon interests of general shareholders of target com- panies. Until now, it has often been observed that opinions issued by special committees stated that the acqui- sition terms were not disadvantageous to minor- ity shareholders on the grounds that the TOB price included a certain premium over the market price. However, the new rules explicitly require target com- panies to obtain an opinion from a special committee stating that the terms and conditions of the contem- plated transactions are fair to minority shareholders. As a result of this amendment, special committees are now required to examine the fairness of acquisition terms more carefully and may no longer rely solely on the existence of a premium over the market price. Additionally, under the new rules, target companies are, in principle, required to disclose the full text of the opinions received from special committees. It is expected that making the full text publicly available will help minority shareholders and the market assess whether the acquisition terms are fair.
advance of their annual shareholders’ meetings. For instance: • HOYA Corporation published its annual securities report three weeks before its annual general share- holders’ meeting; and • T&D Holdings, Inc published its report two weeks beforehand. Moreover, in this season, among the listed compa- nies that submitted their reports in advance, many published them just one day or a few days before the date of their annual shareholders’ meetings. The fact that many companies submitted their annual securi- ties reports only immediately before their sharehold- ers’ meetings is presumed to be primarily due to the lengthy audit process. Given that the FSA explicitly stated that disclosing annual securities reports three weeks in advance is desirable, it is expected that more companies will begin disclosing their reports earlier starting in 2026. Alternatively, there is a possibility that some listed companies will try to postpone their annual general shareholders’ meetings from June (the common sea- son for such meetings in Japan) to July or later, in order to meet the requirement of submitting annual securities reports at least three weeks in advance.
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