TCI Request For Bigger Power Co. Stake On The Ropes

Apr 16 2008 | 2:00am ET

The Japanese government appears set to block a British activist hedge fund’s bid to boost its stake in the country’s largest electric utility.

A government panel convened by Japan’s Finance Ministry unanimously recommended that The Children’s Investment Fund not be allowed to increase its 9.9% stake in Electric Power Development Co., known as J-Power. TCI had sought permission—required under Japanese law to acquire big stakes in companies critical to national security—to boost its stake to 20%.

The foreign capital subpanel of the Finance Ministry’s Council on Customs, Tariff, Foreign Exchange and Other Transactions said a bigger role for TCI at J-Power “may interrupt Japan’s public order.”

“J-Power’s 2,400 kilometer transmission cables are vital to Japan’s electricity supply security,” it said. “J-Power plans a nuclear power plant project, which is vital to the country’s nuclear policy.”

The panel also rejected a TCI proposal to separate the Oma nuclear plant to a state-run firm. The hedge fund had offered to forgo its voting rights on nuclear power issues in exchange for the increased stake.

“We can’t accept this proposal as Japan has just privatized J-Power,” Yoshino, the economics professor who heads of the subpanel, said. “Shifting back to state control contradicts what has taken place.”

The government has until mid-May to issue its decision. A rejection of TCI’s bid would be the first use of its powers to block such acquisitions; the government has approved 760 such applications in the past three years.

TCI does not seem likely to take a rejection quietly: It has asked the European Union to punish Japan’s “violation of free trade and investment between Europe and Japan” if its bid were rejected.

RELATED STORIES

Hohn Seeks EU Help In Bid For Japanese Power Co.
TCI Says It’s No Threat To Japanese Security
TCI Seeks Bigger Piece Of Japanese Power Co.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.