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Japanese paper firm folds on merger deal
Last Updated(Beijing Time):2006-08-28 09:56
Japan's largest paper producer Oji Paper Co plans to drop its hostile bid for rival Hokuetsu Paper Mills Ltd, at least for now, news reports said yesterday.

The takeover battle - started by Oji this month - is believed to be unprecedented, pitting one Japanese company against another in the same industry.

Japan's Asahi newspaper reported that Oji plans to drop its takeover bid for now because it is unlikely to acquire more than 50 percent of Hokuetsu shares. The report cited an unnamed Oji official.

Kyodo News agency said Oji plans to convey the plan to shareholders at the end of this month.

Oji and Hokuetsu officials were not available for comment yesterday.

The tender offer bid came a week after Hokuetsu rejected a first merger proposal from Oji and said it would instead go ahead with an previously planned tie-up with trading company Mitsubishi Corp.

Oji has said earlier that it would spend at least 80.66 billion yen (US$707 million) to take a controlling 61 percent stake in Hokuetsu. The tender offer will run through September 4.

Oji has considered lowering the target stake to 33.3 percent, but the company would need to negotiate with Hokuetsu's shareholders including Mitsubishi to do so, the Asahi reported. Mitsubishi, which has a 24.4 percent stake in Hokuetsu, said it has no plans to negotiate with Oji, the daily said.

Source:Shanghai Daily 
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