Japan's government is telling the country's corporate sector to be more open to the idea of takeovers.
The industry ministry's advice is in the form of a new set of guidelines.
One states that management should treat buyout offers in good faith. The guideline notes that takeovers can turn around inefficient management, raising a firm's value.
Another item asks companies that receive buyout offers to take into account the views of shareholders. This includes getting them onboard at general meetings when introducing or invoking anti-takeover measures.
It says there have been cases in which general shareholder meetings have dropped interested parties when decisions were made on the defensive measures.
The guidelines say such blocking actions could hamper takeovers capable of producing positive outcomes.
Such defensive moves should be limited to extremely exceptional cases.
Some of the guidelines are addressed at investment funds and others aiming to acquire companies. They are advised to appropriately disclose information on the purpose of their buyouts and other issues.
The investors are also asked to give sufficient time for shareholders to thoroughly consider their proposals.
Ishiwata Gaku, a lawyer who took part in drawing up the guidelines, says, "We are in an era when takeovers that lack consensus are no longer a surprise. It's becoming very important for corporate management teams to consistently work toward improving their firms."
Ishiwata added that greater engagement of Japanese companies in their takeovers can help vitalize the economy by making corporate management more efficient.