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47.41% of Capcom's board approved the renewal of takeover defense counter-measures; Capcom expected to re-propose the plan next year

Posted by Cheng Kai 'KarbyP' Sim • June 29, 2014 at 12:04 p.m. PDT

Japanese news portal Business Journal has published a report that sheds a little more light on the Capcom board's rejection of Takeover Defense Plan at the company's general shareholders' meeting recently.

According to the report, 47.41% of the board were in favour of renewing the plan, down from 58.92% at the general meeting held on June 2012.

Business Journal considers this an anomaly, especially since 45.08% of Capcom's stock is currently held by foreign investors outside of Japan. This figure has increased by more than 10% since 2012.

So what caused the Capcom board to reject the renewal of takeover defense counter-measures?

According to the report, Capcom's foreign shareholders (outside of Japan) saw the takeover defense plan as a white elephant, as they stand to profit greatly from an M&A (Mergers and Acquisitions) deal, should something of the sort happen.

An American consultancy firm that these foreign investors hired had recommended against the Takeover Defense Plan.

But an M&A is not something that Capcom board chairman and CEO Kenzo Tsujimoto would want, Business Journal writes.

Tsujimoto has reportedly been pumping his dividend earnings from Capcom into Kenzo Estate, his winery business in Napa Valley.

You may think it a little odd why the founder of one of the most successful video games companies in the world would think to go into the winery business.

But the rationale behind this move is a lot more logical than you'd think: as the games industry is subjected to plenty of uncertainties, Tsujimoto decided a number of years back to invest in an industry that has remained viable for over hundreds of years: winery.

In the first place, it was only through sheer luck and market conditions that led to Tsujimoto founding Capcom. After completing high school, Tsujimoto had inherited his family's food wholesaling business from his uncle.

Eventually, he decided to leave the family business. Next, Tsujimoto started a company selling cotton candy and, subsequently, pachinko machines designed for children. Gaming machine sales were so booming that he eventually decided to rent out the machines instead of selling them.

But when the Space Invaders boom, and such gaming machines in general, started to fade, Tsujimoto moved on to found Capcom, in order to capitalise on the console gaming boom.

Tsujimoto's latest venture, Kenzo Estate has thus far been a success. But it is still in the growing stage. Should Capcom be acquired, Tsujimoto may stand to lose a reliable way of financing his winery business.

As such, Business Journal is reporting that Capcom plans to re-propose the takeover defense plan at the general shareholders' meeting next year.

Source: Business Journal.

Comments

ModAL said on June 29, 2014 at 12:20 p.m.

It might be to late by then.

#1
tihssisbuhtneve said on June 29, 2014 at 12:20 p.m.

(This user was banned.)

#2
TwoBears77 said on June 29, 2014 at 12:28 p.m.

Mergers are part of life in business and given the reports about Capcom's bottom line over the past few years I couldn't imagine investors being averse to a takeover. For Tsujimoto, I imagine the idea is that the vineyard will be a self-sustaining business, although the booze snob in me scoffs at Napa Valley, despite the fact that the quality of of California-based wines has improved dramatically over the past decade. Also, what is with all the one-sentence paragraphs?

#3
Kira665 said on June 29, 2014 at 12:31 p.m.

so... if Capcom goes down, Tsujimoto is working on being able to make a new Capcom from scratch just in case?

#4
KarbyP said on June 29, 2014 at 12:37 p.m.

Why would he?

#5
M1N0RA said on June 29, 2014 at 12:47 p.m.

Capcom is colluding.

#6
6748 said on June 29, 2014 at 12:58 p.m.

I want street fighter to go to sony or disney

#7
Hakansoilbarrel said on June 29, 2014 at 1:16 p.m.

(Is the venue part of the fight tracker gonna work soon?)

#8
Tragedy said on June 29, 2014 at 1:20 p.m.

Capcom + SNK Merger > Capcom being divided among various companies > Capcom being bought out by MS or Sony > Everything Else > Capcom being bought by Nintendo.

#9
SeriphAngel said on June 29, 2014 at 1:30 p.m.

Still say Namco is the best option. I feel they would give the games the appropriate burst of fresh air they need.

#10
SKILL said on June 29, 2014 at 1:36 p.m.

I agree. NAMCO or SNK would be great choices. Dont agree with SONY or M$OFT cause i like SF games to be enjoyed by all platform holders!

#11
SeriphAngel said on June 29, 2014 at 1:39 p.m.

Agreed. I just want the series to expand instead of going backwards. Capcom is too scared of change. Either of those companies I know would do the series justice since both have already worked with them in the past.

#12
PurplePonyJotaro said on June 29, 2014 at 1:41 p.m.

Like they are even worth that much.

#13
Guybrush20X6 said on June 29, 2014 at 1:45 p.m.

What does this all mean in English instead of Economic-ese? Is Capcom for sale and if so as a whole or in parts like THQ?

#14
GakoTheChef said on June 29, 2014 at 1:55 p.m.

So a merger might happen in a year? I dont really understand this legal talk.

#15
The_Big_Boss said on June 29, 2014 at 2:01 p.m.

I'm with the two above. I think the best bet is Namco.

#16
SnakeX said on June 29, 2014 at 2:12 p.m.

Just a reminder before people get too ahead of themselves playing armchair business consultants, in order for any outside company or source to gain a majority control of Capcom's shares, they would have to drop just under 500 million USD for 50% of their stocks. That is not a small drop in the bucket for any company.

#17
SnakeX said on June 29, 2014 at 2:17 p.m.

Their stocks are going to be up for grabs. If any party, be it another company or whatever, buys up a majority of their stocks (50% or more) then they would essentially have sway in the major decision making at Capcom. This includes who sits on the board of directors, what business ventures the company is allowed to pursue, and so on.

#18
SnakeX said on June 29, 2014 at 2:17 p.m.

The option for a merger is POSSIBLE, not that it will necessarily happen.

#19
xShonuffx said on June 29, 2014 at 2:19 p.m.

Are you serous?!?!?!

So you mean to tell me Capcom is no more than a means to supply the fools Winery Business?

No wonder Capcom games have gone to the crapper. There is absolutely no love or compassion that comes when making these Capcom games.

So there you have it guys. That us why we don't have Mega Man games or focus on classic Capcom gaming. This dude is just using Capcom to financially support his other business. Screw that noise.

The board is right. SELL THIS B*TCH! Give it to someone who has passion for games and ACTUALLY CARES!!!

#20
SnakeX said on June 29, 2014 at 2:25 p.m.

No, you're looking at it wrong.

The money he makes he invests into his winery company because the video game market is far more volatile than the wine market is. So what he's doing is that in the case that Capcom and the market it is in starts to sink, he'll still be financially sound.

It's a very common business tactic. You never want to put everything you've got into one single thing, because then that means that one single thing will determine whether you're living well or out on the streets. See how that can be super risky?

You can put your pitchfork down now.

#21
Guybrush20X6 said on June 29, 2014 at 2:30 p.m.

Ah thanks.

Theoretically, would a Kickstarter to buy Capcom's stock be possible (feasibility is another matter, I know) or would you have to be a registered business to do so?

#22
SnakeX said on June 29, 2014 at 2:37 p.m.

It's definitely feasible, assuming that Kickstarter campaign would have all the proper paperwork and legalities and all that. But then again, how likely is it that we would see a campaign raise nearly 500 million within the set amount of time Kickstarter allows? Kickstarter is usually for niche ideas that struggle to find funding elsewhere, I think a stock buyout is a little beyond it. But like I said, it's certainly a feasible scenario...just not a likely one.

#23
FalsoL said on June 29, 2014 at 2:52 p.m.

I thought I understood English, but literally I can't understand 90% of this post. Is talking about baseball or something?

#24
theshredder39 said on June 29, 2014 at 4:14 p.m.

Now I WANT Nintendo to buy Capcom just cause I see a lot of people disliking the idea, I want to see Nintendo buy Capcom and do some mind blowing stuff to prove the pessimistic folks wrong.

#25
Felix said on June 29, 2014 at 9:42 p.m.

I think a lot of the recent press has just helped increase interest in Capcom's stock. Maybe it will help get investors to look at them as a potentional option, as the IP's that company has are worth their weight in gold or Yen, wouldn't you think?

#26
HokutoShitKen said on June 29, 2014 at 10 p.m.

Mega Man belongs on Nintendo. Home. I mean, currently Nintendo is the only company doing anything with Mega Man. Aside from the obvious inclusion of Mega in Smash Bros, all the MM Classic and X games have been released on Nintendo EShop and the MM Zero franchise is slated to be released on there next. I really wouldn't mind where anything else went as long as it doesn't go to stupid Microsoft. Resident Evil on Nintendo or Sony is fine with me, RE is home on Sony platforms but Nintendo has done the best with the Resident Evil games in recent releases. RE4 and the 2 RE remakes. Unlike those horrid outbreak games Sony was putting out, among others. Street Fighter would be best on Sony so if it happens that way, I wouldn't mind.

#27
TECHiSOBA said on June 29, 2014 at 10:11 p.m.

Capcom + Namco Bandai or SNK = best choice of option for a merger

both company can be till loyal through their goals and franchise (fans, games, merch, etc = profit)

#28
OhYouDontSayThat said on June 30, 2014 at 12:52 a.m.

Capcom + Capcom or Capcom = best choice. Don't let some other company get their hands on your amazing IPs, which are the best in the biz.

... that being said, don't keep giving us sh*t wrapped in a bow that says "Resident Evil" or "DmC" when it's clearly not.
STRIKE A BALANCE, CAPCOM! AND LIIIIIIIIIIIIIIIIIIIIIIIIIIIIIVE

#29
CrimsonRex said on June 30, 2014 at 1:27 a.m.

Capcom + Namco = iCame.

#30
hoodlum said on June 30, 2014 at 3:37 a.m.

To be honest i dont like the idea of anybody gettin their hands on capcom and/or its IPs. As far as business and game ideas go they made some horrible decisions but i'd still prefer it to be a standalone company and not to be merged with anybody, no namco, no nintendo, disney and most of all not microsoft or sony for obvious exclusive rights reasons.

#31


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