Japanese banks less reluctant to finance hostile takeovers, lobby chief says By Reuters


By Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) – Japanese banks will become less willing to finance illegal transactions as new government guidelines lift restrictions on such transactions, Japan’s new banking chief said.

The comments of Akihiro Fukutome, the head of the Japanese Bankers Association, provide evidence of a sea change in Japan that has helped bring it closer to European trade.

“Banks in the past were concerned about the reputational risk” of supporting unsolicited businesses, Fukutome said in an interview. “But I believe that the new guidelines from the Ministry of Industry last year will help to reduce psychological problems.”

Hostile ads, once rejected because they were seen as disrupting Japan Inc’s corporate culture, are still rare, but their frequency is increasing.

The Ministry of Trade and Industry (METI) last year released new M&A guidelines aimed at tackling overly defensive practices, removing the long-standing stigma associated with unsolicited deals and encouraging corporate takeovers.

The non-binding guidelines have already prompted companies such as electric motor maker Nidec and life insurer Dai-ichi Life Holdings to launch aggressive advertising.

Fukutome, who also heads the big bank Sumitomo Mitsui (NYSE: ) Financial Group, said banks should consider what they won’t ask for if a deal would benefit the company and improve its long-term value.

“The nature of unsolicited business is changing, and we’ve seen an increase in such products in our pipeline,” he added.

There have been three anti-takeover proposals in the past 12 months in Japan, including a request by Brother Industries to block a management buyout from Roland DG, LSEG data show.

Japanese investment bank Daiwa Securities Group has said it is ready to advise the interested party on whether the deal would benefit the target company or its companies.

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