Nisshin Steel announces fair rules revisions for shareholdings acquisition

Monday, 21 Sep 2009

Nisshin Steel Co Limited has adopted the fair rules for the acquisition of substantial shareholdings by the resolution of its Board of Directors since September 28th 2006.

At that time, circumstances often arose in the Japanese capital markets where large scale stock accumulations were made without shareholders or other related parties being provided sufficient information, which could result in harm to the corporate value of the target and the common interests of its shareholders.

The board also considered that a bidder could time such an acquisition to take place at the time Nisshin Steel’s stock is underperforming due to a temporary factor such as a market cycle related to steel and raw materials.

Under such circumstances, the board believed that, in case a takeover proposal was made, it was necessary to adopt an appropriate rule to determine the procedure under which the ultimate decision as to whether or not to accept the proposal could be made by Nisshin Steel’s shareholders at the time the takeover proposal was made.

In light of the foregoing, Nisshin Steel adopted the Plan, which was designed to enable the shareholders to make a duly informed judgment as to whether to accept a takeover proposal based on sufficient information and a reasonable time period, as well as to prevent excessive stock accumulation on a large scale which could be detrimental to corporate value and the common interest of shareholders, by requiring a bidder to provide the board with sufficient information and a reasonable time period to permit the Board to consider the takeover proposal and pursue alternatives.

At the meeting of the board held on September 30th 2008, Nisshin Steel renewed the initial Shelf Registration before the expiration of its effective period. At that occasion, the board made certain revisions to the plan in terms of terminology and others based upon amendments to the relevant laws.