Oji Paper drops hostile takeover bid

Posted: 31 August 2006 in Hokuetsu Paper Mills, Japan, Mitsubishi, Nippon, Oji Paper

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.

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