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Shareholders Greenlight Tecmo-Koei Merger, Effissimo Holds Out

Tecmo and Koei will officially unite under a holding company on April 1, now that it's received a greenlight from its shareholders -- all except one, 18 percent Tecmo stakeholder Effissimo Capital, which may sell its shares in disapproval.
The Tecmo-Koei merger received the greenlight of its shareholders today, and the two companies will officially unite under a holding company on April 1. But according to a Bloomberg report, not all shareholders were on board -- Effissimo Capital, who with an 18 percent stake is Tecmo's second-largest shareholder, may sell due to its opposition to the merger. Effissimo has asserted that Tecmo hasn't adequately explained the merger's benefit to shareholders, and are unconvinced Tecmo can continue to generate value for them. Tecmo revealed its intentions to merge with Koei in early September through a a ¥20 billion ($221.6 million) deal officially finalized in November. Its decision came after rejecting a $206 million friendly takeover offer from Square Enix, claiming a merger with Koei stands a better chance of "boosting corporate value." The holding firm is expected to generate over ¥70 billion ($775.5 million) in sales and reach a ¥16 billion ($177.3 million) operating profit in the year ending March 2012. According to Bloomberg, Tecmo's investors will receive a 0.9 share in the merged company for every stock they hold, while Koei's shareholders will see a one-for-one exchange.

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