Idemitsu Kosan Co passed over concerns that the son of its founder raised privately about plans for Japan’s second-biggest refiner to merge with smaller rival Showa Shell, his lawyer told Reuters in an interview on Friday.
Shosuke Idemitsu, 88, the son of founder Sazo Idemitsu, publicly broke with the company’s plans for the merger at a meeting last week, shaking up Japan’s staid corporate world. This may be the beginning of the drawn-out battle. The family has said it sees no chance of a compromise on the issue, the family’s lawyer, Takujiro Hamada, told Reuters.
The former president and now honorary chairman Shosuke Idemitsu is leading the family against the merger with Showa Shell, including the purchase of Royal Dutch Shell’s 33.3 percent stake. Its opposition to the re-election of the company board came close to removing Idemitsu president Takashi Tsukioka, along with other board members, in a vote at the shareholder’s meeting.
Shosuke wrote to Idemitsu opposing the merger in December and again in May after the company did not heed his advice, said Hamada.
After at least two discussions with Idemitsu, Shosuke felt compelled to make the matter public through comments Hamada made at last week’s meeting, Hamada said.
“During the talks, Idemitsu touted various merits of the merger, like good locations of refineries,” Hamada said.
An Idemitsu spokesman said on Monday that its talks with the family may have been inadequate from their point of view, and added it would try to deepen communication with them from now on.
The founding family’s 33.92 percent stake is large enough to veto the merger plan when it comes up for consideration at a special meeting expected later this year.
Shosuke “does not want to fight and until the last moment wanted to calm things down via talks,” said Hamada. He declined to comment on any future legal action the family would take.
The merger is one of two big combinations backed by Japan’s powerful industry ministry in the country’s struggling refining industry. But, it was recently delayed because anti-competition authorities are still reviewing the plans.
The increasing rivalry between Iran and Saudi Arabia makes the merger inappropriate, the Idemitsu family has said. Showa Shell is 15 percent owned by state-owned Saudi Aramco while Idemitsu has a close relationship with Iran spanning decades.
Corporate cultures may also be difficult to reconcile. Sazo Idemitsu built the company into a self-described challenger to the dominance of the global oil majors.
(Writing by Aaron Sheldrick; Editing by Christian Schmollinger)
http://www.reuters.com/article/japan-idemitsu-kosan-idUSL4N19N1RG
Source: Reuters.com