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.

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