Japan’s Inui Global Logistics is asking shareholders to vote for a revised corporate defence plan at its annual shareholders’ meeting, to block a possible takeover bid from Alphaleo Holdings.
The move is the latest episode in an acrimonious relationship between Inui and its largest shareholder, Alphaleo, which controls 31.5% of the company's voting rights.
Inui is seen as an attractive takeover prospect. It directly owns 22 bulkers between 23,000 dwt and 56,000 dwt, and it has extensive prime real estate and warehousing properties.
In its tussle with Inui over the past three years, Alphaleo has filed litigation against the Tokyo-listed company eight times and submitted 13 resolutions to shareholding meetings against management's strategy.
Inui’s current defence plan against large-scale share acquisition expires on June 2022. It is now asking for shareholders to vote for a revised plan that is aimed only at Alphaleo and its associated companies, which include Japanese investment companies Makis Holdings and the Melco Group.
Under the revised defence plan, large shareholding acquisitions will be monitored by an independent board. The board of directors will make the decision on activating defence measures.
However, Institutional Shareholder Services (ISS), the largest provider of proxy advisory services to institutional investors, has stepped into the row, advising Inui’s shareholders not to replace the current plan with the revised defence plan.
ISS suggests that Inui’s revised plan will take away shareholder rights to trigger the “poison pill”, a term used to describe methods of preventing corporate takeovers.
It also pointed out that under the new plan, only the board of directors can end the defence plan, with shareholders having no say.
Inui has responded to the ISS advice, telling shareholders that its new defence plan is more advantageous. It said that by restricting the new plan to Alphaleo and associated entities, it is limiting directors’ power to veto major share acquisitions.
Inui said the new plan “strictly limits the scope of the board of directors’ discretion and drastically improves predictability for shareholders”.
“We hope that our shareholders will duly understand that the new plan is an improvement on the current plan that focuses on the common interests of the shareholders,” it said.
Inui said that if it must wait for shareholder approval, “there is a risk that Alphaleo will manage to force its way through acquisition in the markets or otherwise, therefore holding enough votes to vote down a resolution before a shareholders’ meeting can be convened”.
The shipowner also said that leaving the decisions to directors will save time and money spent on challenging Alphaleo’s attempts to get rid of the defence plan at shareholder meetings.
But Alphaleo has been winning over Inui shareholders to its argument that the current defence plan should be ditched.
It was last put to the test in May 2020. According to Alphaleo's figures, at that time 52.4% of Inui shareholders voted in favour of keeping the current plan and 47.6% voted for a resolution to ditch it.
