Hostile Takeover - Stock Essay Example

Hokuetsu Paper did not understand that Oji Paper was really willing to do the acquisition even if it was not in a harmony manner. The fact that Hokuetsu´s President &CEO, Miwa had long been acquainted with Oji Paper´s Chairman, Suzuki let the executives make a little confusion that they could have informal discussions without taking the objectives of each one very seriously. Therefore, Hokuetsu Paper started to take attitudes against the hostile takeover a bit late and it could be done differently. Since Hokuetsu Paper values the communication with shareholders for survival, the company should have alerted them much earlier about Oji´s intentions and that everything would stay the same, i.e. the company would keep being independent, and tell them about the agreement with Mitsubishi, since it was a certain step.

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What were some of the strengths Hokuetsu Paper demonstrated in this effort? Why did they work?
A key strength demonstrated by Hokuetsu Paper, in defending itself from a hostile takeover bid by Oji Paper, was its ability to formulate and implement a strategic communication plan in a timely manner that included all of its shareholders and stakeholders. Hokuetsu Paper was able to gain the support of the local and business communities by demonstrating the value of keeping Hokuetsu Paper independent. The communication plan was successful because it was concise, culturally conscious and integrated with the legal and financial aspects of the defense. The Niigata community as well as Japanese culture value harmony, relationships, and collectivism. By hiring the communication advisory firm, Media Gain, Hokuetsu Paper was able to ensure their messages were effectively distributed and interpreted; which proved to be invaluable in their efforts.

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Shang-Wa had already suggested a partnership to Lester Electronics, but this is now becoming more urgent due to a hostile takeover bid by TEC.

Overall, Oji Paper could have done many things differently, starting with a well developed plan for its aim, since it was a modern step in a country where hostile takeover is not usual. They should have included in its plan many different steps, such as doing a research on the target company, understanding their principles and the parts evolved, and speculate Hokuetsu´s intention with Mitsubishi. Also be advised by a financial and lawyers advisors, so they could be more prepared to move on with its M&A action, which was not the preference way to deal with other companies in Japan. These few steps would have avoided many problems, such as the way of approach, which actually helped Hokuetsu Paper to be prepared and establish a well-developed takeover defense measure, culminating to the Oji Paper´s failure in the acquisition of Hokuetsu Paper.