Open-tender regulations should cover stock acquisitions in off-hours trading involving less than one-third of outstanding shares in a company if the buyer intends to eventually obtain more than one-third, Financial Services Minister Tatsuya Ito indicated Wednesday.
He made the remark at a House of Representatives committee meeting on a bill to revise the Securities and Exchange Law in order to expand the coverage of open-tender rules that oblige a buyer to publicly announce a price, a tender period and other details of a massive share buy.
The open-tender regulations are designed to give a wide range of shareholders opportunities to sell shares. An equity stake exceeding one-third carries the right to veto key proposals at a general shareholders' meeting of a company.
Currently, the regulations are applied only to off-market acquisitions of an equity stake exceeding one-third of a company, but financial authorities plan to expand the application to similar deals in off-hours trading as well.
The plan was prompted by Internet firm Livedoor Co.'s surprise massive acquisition of Nippon Broadcasting System Inc. shares through off-hours trading in early February. Because the acquisition was done through off-hours trading, Livedoor was not required to publicly announce details of the deal.