Oji Paper has dropped its hostile takeover bid of rival company Hokuetsu Paper Mills Ltd. Oji planned to spend US$1.4 million to take a controlling share in Hokuetsu, Oji President Kazuhisa Shinoda said Oji would be unable to acquire more than about 28 to 32% of shares in Hokuetsu.
Hokuetsu had earlier rejected Oji’s merger proposal and sold a 24% stake to Mitsubishi Corp. Soon afterwards Nippon Paper bought 10 per cent. “If Oji successfully takes over Hokuetsu, we’ll be forced into a disadvantageous position because there’ll be a clear difference in sales,” Nippon Paper President Masatomo Nakamura told the Daily Yomiuri. “This was purely a way to protect the interests of our company,” he said.
At a press conference on 29 August 2006, Shinoda said that instead of the takeover, Oji Paper will expand its operations by investing in new projects.