TBS calls foul on Rakuten approach

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TOKYO --Increasingly concerned by the possibility of a successful takeover bid following its general shareholders meeting in late June, Tokyo Broadcasting System on Tuesday requested that Rakuten Inc. cease collecting proxies from TBS shareholders.

The Japanese Internet mall operator recently announced plans to increase its stake in the company to more than 20%, which would effectively turn it into an affiliate, and requested that TBS permit Rakuten president Hiroshi Mikitani and another senior official to become external directors.

But Japan's fifth-largest broadcaster is fighting back with a written request that claims the wording of the approach to shareholders is misleading. Should Rakuten attract sufficient support at the June 28 shareholders meeting, the prolonged saga over ownership of the company could come to an end, with Rakuten victorious.

At present, Rakuten owns 19.86% of TBS and has announced that one of its subsidiaries will purchase additional shares to surpass the 20% threshold.

Rakuten is trying to alleviate investor fears, however, saying in a statement on its Web site that it "aims, on a mid- and long-term basis, to leverage the respective strengths of TBS and Rakuten in order to realize the full benefit of providing services that combine the resources of both broadcast media and the Internet service industry."

In addition, the statement continues, "Rakuten fully understands and respects the importance of broadcast media and the Internet service industry in our society and intends to further ensure and enrich the public nature of broadcasting through its relationship with TBS."

TBS officials were not available for comment on the latest maneuver, but the company has expressed its opposition to a hostile takeover approach in the past.

Rakuten proposed integrating the management of the two companies in October 2005 after acquiring an initial stake in the company. The broadcaster deflected the initial approach, with the two agreeing on areas of cooperation and that Rakuten would put its stake in the company into trust and freeze its voting rights.

That arrangement came to an end in February, leaving TBS open to unwanted approaches.
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