Livedoor Co.'s highly publicized hostile takeover bid for Nippon Broadcasting System Inc. (NBS) has ended with the Japanese Internet firm agreeing to give up its majority stake in the radio firm, but the saga has provided corporate Japan with valuable lessons on mergers and acquisitions (M&A).

Livedoor and Japan's leading television network Fuji Inc., locked in a bitter fight for control of NBS since early February, agreed Monday that Fuji TV will spend 147 billion yen (1.37 billion US dollars) to buy all of Livedoor's hard-won stake in the radio firm along with a 12.75 percent interest in Livedoor.

Livedoor, for its part, will accomplish its goal of forming a business tie-up with Fuji TV. But nothing has been decided on the specifics of their business alliance, including how to integrate Livedoor's Web portal business with broadcasting services provided by Fuji TV and NBS.

The curtain fall of the takeover drama was not as dramatic as many had expected.

Yet economic experts say the takeover tussle should be given credit for making Japanese corporate managers think about important questions pertaining to corporate governance.

One of the most important issues raised by the takeover brawl is the question of who a company belongs to.

Experts who were in support of Livedoor tended to underscore that a company belongs to its shareholders. Others argued that such a tenet, transmitted from Wall Street, is not completely valid and that a company belongs first to its management and employees.

In other words, at stake is whether or not the American model of free-market capitalism should be adopted in Japan, and the answer to this question is still up in the air.

The high-profile tussle also made corporate Japan realize that the country still lacks adequate rules and effective defensive measures against those attempting hostile takeovers.

Many Japanese corporate leaders had believed that their companies would never be subject to hostile takeovers until recently, as many companies in the country have been protected by a web of cozy cross-shareholdings with their banks and affiliates.

Japanese corporate managers are now busy studying measures to defend their companies from hostile takeover bids as if they were students cramming for important exams.

In the course of the takeover tussle, terms such as "M&A", " poison pill", "crown jewel" and "white knight" gained currency in boardrooms.

Books on M&As are piled up high in bookstores across the country, and seminars on techniques for warding off unwanted takeover bids, hosted by financial institutions and business groups, are now extremely popular.

Major Japanese companies, whose market values are small compared with those of their foreign rivals, were prompted by the takeover fight to seriously consider adopting measures including the so-called "poison pill" defense.

Hitachi Ltd. has said it is considering amending its articles of incorporation to make the poison pill defense and other counter- measures possible. The poison pill gives shareholders other than those involved in a hostile takeover the right to purchase more shares at a discount in the event of a takeover attempt.

Mitsubishi Electric Corp. has said it will tell its stockholders at this year's shareholders meeting in June that it is preparing measures to defend itself from hostile takeovers.

There is also a growing trend toward strengthening cross- shareholding ties in the steel and oil industries.

But experts say worrying about technical strategies will do Japanese companies no good.

Winning shareholder trust and responding to their expectations is the most powerful weapon to protect their companies, the experts say.

As for defensive measures, they say that it is imperative that Japanese corporate managers boost their companies' corporate value and stock prices.

Source: Xinhua