Idemitsu Kosan Co., Ltd. Completes ¥125 Billion Global Offering of Shares of Common Stock

July 20, 2017

Idemitsu Kosan Co., Ltd., the second-largest petroleum company in Japan, closed an approximately ¥125 billion ($1.115 billion) global offering of shares of its common stock. Idemitsu has Japan's second-largest network of retail gasoline service stations, and has the second-largest refining capacity in Japan. Idemitsu also produces and sells various other products, including petrochemical products and OLED materials, and is engaged in the exploration and production of natural resources such as oil and coal.

On the day after the launch, the founding family of Idemitsu, which directly and indirectly controls more than one-third of Idemitsu's total voting rights (which enables them to veto Idemitsu's major corporate actions, such as a merger), filed a petition for a provisional injunction with the Tokyo District Court against the issuance of new shares in connection with the global offering. The founding family is against a business combination that Idemitsu has agreed upon with Showa Shell Sekiyu K.K., which is the fourth-largest petroleum company in Japan, and alleged that the global offering should be enjoined because the primary purpose was to dilute and deprive the founding family of the veto right. On July 18, the Tokyo District Court issued a ruling to dismiss the petition, against which the founding family appealed on the same day. This appeal was also dismissed on July 19.

The global offering consisted of a public offering of 33,600,000 shares in Japan and an international offering of 14,400,000 shares outside of Japan in reliance on Rule 144A and Regulation S. S&C represented the international managers in the international offering.

The S&C team was led by Izumi Akai and Keiji Hatano, along with Hiroko Tsurumaru. David Simins handled tax matters, and Tracey Russell handled blue sky matters. Eric Kadel advised on OFAC matters. Roger Gaspard, Lars Rueve and Alan Zhang advised on U.K. and E.U., France, Germany and Hong Kong law-related matters, respectively.