By Anton Bridge, Makiko Yamazaki, Ritsuko Shimizu and Miho Uranaka
TOKYO (Reuters) – Private equity giant Carlyle is in talks with Japan’s Makino Milling Machine as a potential white knight buyer to counter a $1.81 billion hostile takeover bid from Nidec, four people familiar with the matter said.
The sources declined to be named as the information is not public.
The battle to take the machine tool manufacturer private is heating up, with Nidec launching its tender offer for 11,000 yen ($77.30) per share on April 4 and Makino’s board approving a “poison pill” takeover defence last week. The offer values Makino at 257 billion yen.
Makino had received interest from Carlyle, MBK Partners and Nippon Sangyo Suishin Kiko Group (NSSK) but the latter has dropped out, according to three sources, including two of the four people familiar with the matter.
Carlyle has turned more cautious in the aftermath of U.S. tariff announcements, one of the sources said.
It is not yet clear whether Carlyle will put in a formal offer, three of the people said.
Carlyle and Makino declined to comment. NSSK and MBK did not respond to Reuters’ requests for comment.
The tussle illustrates the intensifying dealmaking environment in Japan. It is rare to make an solicited bid without making prior contact, as Nidec has done.
Nidec on Wednesday filed for an injunction to block the “poison pill”, which issues free stock warrants to existing shareholders to dilute Nidec’s stake and hinder a takeover.
Makino has asked shareholders not to tender to Nidec, arguing that as talks with white knight suitors are ongoing, launching the bid at this stage does not leave enough time for shareholders to make a decision.
The deal comes as Japanese authorities are actively promoting M&A deals. Japan’s economy ministry published guidelines in 2023 that cracked down on takeover defence tactics and state credible offers must be given proper consideration.
The guidelines add that poison pills are appropriate if the buyout would harm corporate value and shareholders’ common interests.
“Makino’s reaction is the classic reaction of a Japanese company targeted by a buyer,” said Takamitsu Araki, chief M&A officer at Nidec.
“Our ultimate goal is to expand the enterprise value and increase employment. We’re totally strategic,” Araki added.
The share issue still requires shareholder proposal at Makino’s annual general meeting, scheduled for June.
($1 = 142.3000 yen)
(Reporting by Anton Bridge, Makiko Yamazaki, Ritsuko Shimizu and Miho Uranaka; editing by Gerry Doyle)
