TOKYO (Reuters) - Trading house Itochu Corp said on Friday it has amassed a 40 percent stake in sportswear maker Descente Ltd, setting the stage for a rare hostile takeover in Japan’s consensus-driven market.
Itochu, which previously held around 30 percent of Descente shares, offered in late January to buy more from other shareholders at a 50 percent premium.
A stake of more than one-third gives Itochu veto power over acquisitions and other strategic decisions. The company will also have a greater say in nominating Descente’s board members.
Descente, which has licensed brands such as Le Coq Sportif, Munsingwear and Umbro and is heavily focused on the South Korean market, has publicly opposed the takeover.
Descente on Friday acknowledged the results of the tender offer and said it wanted to resume talks with Itochu towards a resolution. It declined to comment on media reports which have said that its President Masatoshi Ishimoto would likely step down after a takeover.
Itochu first acquired a stake in Descente when it rescued a financially strapped Descente in the 1980s. Tensions between the two have simmered ever since, with Descente in 2013 removing a president installed by Itochu and replacing him with Ishimoto, a scion of the founding family.
Itochu has said the company needed better management and should expand into markets such as China.
Hostile bids are unusual and rarely succeed in Japan, with corporate boards traditionally controlled by company executives.
Many companies adopted “poison pills” and other takeover defenses after a high-profile bid by Internet firm Livedoor for broadcaster Fuji Television Network in 2005.
But a government push for better corporate governance has forced companies to open up their boards to more independent directors, with some abandoning takeover defenses in the past few years.
Reporting by Ritsuko Ando; Editing by Muralikumar Anantharaman and Subhranshu Sahu