TBS shareholders OK poison pill

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TOKYO -- Tokyo Broadcasting System bought itself more time Thursday after its shareholders voted strongly in favor of measures that would make a hostile takeover bid for the television company more difficult.

More than 77% of the shareholders attending the meeting in Tokyo voted for a "poison pill" designed to keep Internet mall operator Rakuten Inc. at bay. Rakuten already holds a stake of more than 19.8% in TBS, and its president, Hiroshi Mikitani, has stated that he wants to surpass the 20% threshold that would effectively turn it into an affiliate.

The shareholders approved a plan for TBS to issue equity warrants to existing shareholders to dilute any voting rights acquired by an unwelcome investor. They also rejected a proposal that Mikitani and another member of the Rakuten board be permitted to join the TBS board.

Rakuten has been eyeing the broadcaster for several years and proposed integrating the management of the two companies in October 2005 after it had acquired an initial stake in the company. That approach was deflected and the two agreed on areas of cooperation, though Rakuten is now stating that it wants a far bigger say in the running of TBS.

Rakuten attempted to allay shareholders' fears before Thursday's meeting by issuing a statement saying 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.

"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," it continued.

The appeal had little impact on the shareholders -- though Rakuten vp Atsushi Kunishige told those assembled that his company is still considering increasing its stake.

It also was announced Thursday that TBS had signed a capital and business alliance with Recruit Co., a magazine publisher. The agreement is widely seen as an effort to use cross-shareholdings with a strong and secure company to deter further approaches from Rakuten.
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