Triangle-Merger Delay ? Minor Bump on a Major Road
Robert Alan Feldman of Morgan Stangley (Tokyo) has some interesting thoughts on the whole Livedoor/FujiTV spectacle. This is the first time that I’ve actually touched upon this topic, even though it is a daily discussion topic for Japanese people everywhere.
Basically the short story is that there’s a 32-year old Internet entrepreneur, Horie, who’s CEO of Livedoor, an Internet portal. He’s raised a lot of money with Lehman Brothers and is trying to do a hostile takeover of FujiTV, one of the main TV companies in Japan.
Because Japan is new to hostile takeovers, it is a big discussion issue. In general, I don’t think too much of Horie and Livedoor itself, but I do think that hostile takeovers should become more common in Japan- if only to clear out bad management and moribund businesses.
The boardroom and the population are way ahead of the politicians. At recent seminars and discussions in Tokyo, the debate on the Livedoor/Fuji TV battle has shown many nuances. Boardroom people have limited sympathy for either side, in view of the tactics used and the histories of the companies involved. Moreover, the boardroom understands that (1) corporate law changes will create many more opportunities for Japanese companies than for foreign companies, (2) the public largely supports Livedoor — not because of the proposed deal itself but because it sees a crying need for aggressive agents of change. One CEO of a major company said to me, “Two-thirds of the boardroom wants Fuji TV to win (despite reservations about their methods), but two-thirds of the population wants Livedoor to win. We cannot have strong companies if the people do not support us.”
I do think it is very telling that the Japanese people want Livedoor to win- they’ve invested heavily in Livedoor and it would bolster the stock. Whether it is the right thing to do for Livedoor, I think this debate is healthy for Japan. There should be more hostile takeovers in Japan.