A buyback and a tender offer change the parent — from Sumitomo Corporation to Grainger (2009)

Less who holds it than who decides

What makes this shift in ownership unlike an ordinary foreign takeover, one may argue, is that before the buyer gathered shares in the market, the company itself took in the seller’s shares and cancelled them. Avoiding disruption to the share price, raising the per-share value left to the remaining holders, and lifting the American side’s stake automatically from 38% to 48% — three effects rode on the same move. The tender offer was then held to a further 5%, stopping at 52.85%, a bare majority. Control is secured, but the listing and the minority shareholders remain. In the restraint of the design one can read an intention to let the business keep running as it was.

Even so, the tension inherent in being a listed subsidiary did not disappear. The statement that a change of policy at the parent could affect the company’s business development and financial position went on being placed in the annual securities reports afterwards. Business judgement stayed on the Japanese side, and the long-term investment in product information and logistics has been decided by management at home. Who holds the shares and who decides the business do not necessarily coincide — the rearrangement of 2009 was built so as to keep that distance deliberately. As the unwinding of listed parent-and-subsidiary pairs spreads across Japan, how long the distance can be held looks set to remain an open question.