It is reported that Carlyle is negotiating with Japanese industrial gear supplier Makino Milling Machine for a "white knight" acquisition
Private equity giant Carlyle is in talks with Japan's Makino Milling Machine to become a potential white knight buyer to counter the hostile takeover bid from Nidec. Nidec has made a tender offer of 11,000 yen per share, and the board of Makino Milling Machine has approved a "poison pill" defense plan. Carlyle, MBK Partners, and NSSK are interested in Makino Milling Machine, but NSSK has withdrawn. This acquisition competition highlights the intensifying merger and acquisition environment in Japan
According to the Zhitong Finance APP, four informed sources revealed that private equity giant Carlyle (CG.US) is in talks with industrial gear supplier Makino Milling Machine to become a potential white knight buyer to counter Nidec Corporation's (Nidec) $1.81 billion hostile takeover bid. Three sources indicated that it is currently unclear whether Carlyle will make a formal offer.
The battle to privatize the machine tool manufacturer is heating up, as Nidec made a tender offer of 11,000 yen (approximately $77.30) per share on April 4, and the board of Makino Milling Machine approved a "poison pill" defense plan last week. The takeover bid values Makino at 257 billion yen.
According to three sources, Carlyle, MBK Partners, and Nippon Sangyo Suishin Kiko Group (NSSK) are interested in Makino Milling Machine, but NSSK has withdrawn from the bidding.
One source stated that Carlyle has become more cautious following the announcement of tariffs in the United States. This competition indicates that the M&A environment in Japan is intensifying. It is rare for companies like Nidec to make bids without prior contact. Nidec applied for an injunction on Wednesday to block the "poison pill plan"—which involves issuing free stock warrants to existing shareholders to dilute Nidec's stake and hinder the acquisition.
Makino Milling Machine has urged shareholders not to tender to Nidec, arguing that initiating a bid at this stage does not give shareholders enough time to make a decision due to ongoing negotiations with white knight bidders. This deal comes as Japanese authorities actively promote M&A transactions. The Ministry of Economy, Trade and Industry of Japan released guidelines in 2023 to combat takeover defense tactics and stated that credible offers must be given proper consideration.
The guidelines further state that adopting poison pill measures is appropriate if the acquisition would harm company value and the common interests of shareholders. The stock issuance still needs to be proposed to shareholders at Makino's annual general meeting scheduled for June.
Nidec's Chief M&A Officer Takamitsu Araki stated, "Makino's response is a typical reaction of Japanese companies when targeted by buyers. Our ultimate goal is to enhance corporate value and increase employment. We are completely strategic."
