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TOKYO, July 4 (Reuters) - Shares in Japan's Idemitsu Kosan Co Ltd plunged 12 percent early on Tuesday after the refiner said it would issue new stock to raise $1.2 billion in a move that would sharply dilute shareholders' stakes.
Idemitsu said after the market closed on Monday that it would sell 48 million new shares, equivalent to about a third of its outstanding shares, in a move immediately opposed by the founding family, which is trying to block management's plan to merge with smaller rival Showa Shell Sekiyu KK.
Idemitsu's planned share issuance would reduce the family's stake to about 26 percent, from over a third, a calculation by Thomson Reuters showed, taking away the family's right to veto a merger. (Reporting by Chang-Ran Kim)