TOKYO — Japanese entrepreneur Takafumi Horie moved his battle to control Japan’s mighty Fuji TV into Tokyo District Court on Thursday.
His Internet portal operator Livedoor filed an injunction to bar Fuji’s radio affil Nippon Broadcasting System (NBS) from issuing share warrants to Fuji, that would allow the TV giant to regain a 70% majority in NBS and thwart Livedoor’s hostile takeover.
NBS is a tool for Livedoor to get a foothold in both Fuji TV and its parent Fujisankei Group, one of Japan’s largest media congloms, which also had interests in film, publishing and baseball.
As the tiny NBS is the majority shareholder of the much bigger network, a controlling stake in the radio station gives indirect control over Fuji TV, and thus the Fujisankei Group as a whole.
On Feb. 8, Livedoor’s flamboyant 32-year-old CEO Horie announced that his company had secured 35% of NBS mostly during off-hour trading.
Since then, Livedoor has upped its stake in NBS to over 40%, fighting off Fuji TV attempts to regain control of a situation it inadvertently created by announcing it wanted to buy 50% of NBS by late February to remedy the distorted cross-shareholdings between the two companies.
NBS announced the share warrants issue, worth 15.87 billion yen ($152.6 million), on Wednesday. Livedoor’s injunction application argues that issuing new shares to retain management control violates the Commercial Code.
But Horie might have chewed off more than he can handle.
The establishment is fighting back — the government has warned that it will tighten the laws ruling off-hour trading.
Fuji TV is ready for a court battle, with the majority of Japan’s big corporations behind it, as they are aware that some corporate raider might come knocking at their own doors.
Meanwhile, the stock market has shown its displeasure. Shares in Livedoor, NBS and Fuji TV all fell to new lows on Thursday, showing increasing investor unease with a messy situation and a potentially drawn out court battle.