Japan has made changes to its M&A guidelines after more than a decade, the Financial Times has reported, as the market gets ready for an expected spree of management buyouts and companies taking over listed subsidiaries.
According to the FT, the new guidelines emphasise that the old rules did not sufficiently deal with conflicts of interest and easily permitted the steamrollering of minority shareholders’ interests. Officials claimed that the new rules were necessary without which the existing concerns were only bound to multiply as conglomerates such as Hitachi and Toshiba lead a shake-up of the sector through buying in or selling off their hundreds of listed subsidiaries.
The report added that as part of a governance-driven push to reduce the number of listed subsidiaries controlled by parent shareholders, the Tokyo Stock Exchange (TSE) is discussing an overhaul of the market that could see hundreds of small or poorly run companies ejected from the prestigious First Section, the top tier of the bourse.
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