A rights plan is a mechanism of takeover defense measures utilizing stock acquisition rights. Currently there are types such as advance warning type rights plan and trust type rights plan (direct type, SPC type) in Japan. In the modern economy, the means of M & A is becoming very important, and in the event of the absence of a successor of a company or deterioration of business performance occurs, the company is sold by selling the company and purchasing the company to survive the company Means such as letting you do is also commonly seen. However, despite the fact that mutual interests do not agree with each other, there are cases where hostile acquisitions where acquisitions take place are occasionally raised. Rights plan is a defensive measure used to protect our company from this hostile takeover. By granting rights such as stock acquisition rights that allow us to acquire ordinary shares to existing shareholders, we will ensure that our company will not be acquired by the other company in the event of a hostile takeover.
The rights plan has the role of protecting the company when it falls into a situation of hostile takeover that receives M & A even if you are not considering selling the company. There are two types of rights plan depending on its contents, trust type and advance warning type, and the trust type is a thing to act as a defensive measure when a trust bank holds stock acquisition rights and a hostile takeover is set up. Also, there is a movement currently handled by trust banks as financial products, this method called a rights plan trust. On the other hand, in the case of advance warning type, we disclose that our company is taking defense measures and make advance warning before actual hostile takeover is done. In the event that hostile takeovers are likely to take place, based on this advance warning, we will allocate stock acquisition rights free of charge to existing shareholders with the limitation that “hostile takeovers can not be exercised”. As a result, the number of shares existing in the market will increase, so that the shareholding ratio of hostile takeovers declines and acquisition becomes difficult. Such listed defense measures are very important as the listed companies etc. are always at risk of receiving such hostile takeovers.