Japan's Cosmo Energy wins approval for 'poison pill' against activist

TOKYO :Shareholders of Cosmo Energy Holdings approved a"poison pill" takeover defence on Thursday, in a controversial vote that excluded certain activist shareholders and has implications for hostile takeover attempts in Japan.

It marks the second such vote on a poison pill in Japan that excludes an investor, a so-called majority-of-minority vote, a practice some governance experts say could serve as a new weapon against shareholder activism. Cosmo, Japan's third-biggest oil refiner and 20 per cent owned by a group led by prominent activist Yoshiaki Murakami, can now implement a poison pill to dilute the activists' stake if the group buys more shares without taking steps such as stating its purpose.

The company reiterated at Thursday's general meeting that the exclusion of the group from the vote should be justified to"reflect the will of general shareholders", who it believes could be pressured into selling their shareholdings because effective control by the group"would damage corporate value".

The group, which called for a spin-off of Cosmo's renewable energy business and a consolidation of refineries, has argued that such a"forcible and oppressive" voting method would only raise the risks of management entrenchment and potentially set back corporate governance in Japan.

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