Taking 51% of Nihon Nohyaku, spun off in 1928, by tender offer and third-party allotment (2018)

The scar left by the way control was taken

The tender offer alone did not reach 51%. ADEKA closed the gap by having Nihon Nohyaku issue new shares to it. Buying from the market at $8 (¥900) a share while making the same company issue new shares at $6 (¥670) — the two-step design is rational as the shortest route to control, but to a shareholder who had held on rather than sell it also meant a stake diluted at a cheaper price. When US institutional investors objected that the interests of minority shareholders were being ignored, it appears to have been this combination, rather than the level of the price, that drew the reaction.

On the operating side, though, the absorption has paid. Life-science sales grew from $311.6M (¥34bn) to $738M (¥112bn), and the fourth pillar really did stand up. Nihon Nohyaku, for its part, had itself identified strengthening its financial base as the issue, as the wherewithal for R&D and M&A. Even so, seven years later what City Index Eleventh demanded was a special committee to review the policy on holding Nihon Nohyaku. The operating result and the doubt about the shape of the capital remain, separately, side by side.