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ON THE LAST day of July 2004, Kenji Fujita, co-head of M&A for Morgan Stanley in Japan, turned on his TV and got the shock of his life. Fujita had been working hard on one of the biggest deals of his career, representing Mitsubishi Tokyo Financial Group in its proposed $40 billion merger with UFJ, the largest transaction in Japan in 2005, the year it finally closed.
Now on his TV screen appeared Yoshifumi Nishikawa, the highly regarded CEO of rival mega bank Sumitomo Mitsui, explaining why his bank would like to acquire UFJ instead. It was launching an unsolicited takeover bid which, Nishikawa argued, represented a better deal for UFJ shareholders. Sumitomo Mitsui would be prepared to offer a merger ratio which implied a substantial premium to UFJ’s share price.
“I was stunned,” says Fujita. “No one could ever have imagined seeing this kind of aggressive proposal from the head of a leading Japanese financial institution.” Hostile takeover bids had been seen in Japan before.
