If M & A is conducted under mutual agreement between the buyer side and the seller side, it is possible to build a win-win relationship, but not all wind-win relationships can be established for all M & A. As a matter of fact, there are cases called so-called “hostile takeovers” where M & A is launched for companies that are not considering selling the company. If a hostile takeover is launched, the side that got in the way is trying to defend its company. “Pac-Man Defense” can be cited as one means of defense. PacMan Defense is a skillful way of trying to defend yourself against an opponent company that has undertaken hostile takeovers by making acquisitions on the other side by the acquirer. So, how does Pac-Man defense in Japan generally take place? In Japan it is common to do so with the aim of robbing one quarter of the stock of the other company. This is because voting rights on acquisitions owned by acquisitions will be lost at a stage when a company that is acquiring acquires more than a quarter of the shares of companies that acquire them.

Funding power is necessary to execute Pac-Man Defense

Pacman Defense is not an easy thing to do in the first place. In order to make Pac Man Defense successful it will be necessary to secure one quarter of the shares of the acquiring company, so the necessary funds will be very high. Since both sides will compete for each other’s shares in order to achieve their respective objectives, if the situation continues in the long run, it will be necessary to fund purchasing shares of the other company. In the worst case scenario, long-term brawls may continue until either of them reaches a financial limit. So, when adopting Pacman Defense as a defensive measure, judgment is required carefully. The defender who does Pac-Man defense will need to check if sufficient financial margin is left to himself.