Makino Milling Shares Tumble as Nidec Withdraws Takeover Bid – A Corporate Battle’s Fallout

The abrupt withdrawal of Nidec Corporation’s hostile takeover bid for Makino Milling Machine Co. Ltd. (6135.T) has left the latter’s shares in a downward spiral, underscoring the challenges of corporate control battles in Japan. After Nidec abandoned its ¥257 billion ($1.78 billion) offer on April 4, 2025, Makino’s stock closed at ¥11,090 by May 8—a 4.15% decline from its April 1 close—amid heightened volatility and technical sell signals.

The Corporate Showdown

Nidec’s bid, announced in late 2024, sought to acquire Makino outright, aiming to combine their machine tool businesses to create a global leader. But Makino’s board retaliated with a “poison pill” defense, a shareholder rights plan designed to dilute Nidec’s stake if the bid proceeded. Nidec argued this made the deal “significantly economically unreasonable,” prompting its withdrawal.

The dispute centered on timing. Makino had requested a delay to May 9, 2025, to negotiate terms, but Nidec maintained it was actively deliberating and had sought deeper engagement with Makino’s leadership—including its president, Shotaro Miyazaki—without success. Nidec’s press release criticized Makino’s board for adopting the defense without meaningful dialogue, citing meetings totaling just over an hour with Makino’s special committee.

Legal and regulatory factors added complexity. Japan’s Fair Trade Commission (FTC) had cleared the deal on February 12, 2025, finding no antitrust concerns. Yet, the FTC’s approval proved irrelevant against Makino’s defensive measures, which Nidec deemed a “distortion of factual negotiations.”

Stock Performance: A Bearish Turn

The withdrawal triggered immediate volatility, with Makino’s shares swinging between ¥10,880 and ¥12,820 in April (a 16% intraday range). By May 8, the stock had settled at ¥11,090, down 4.15% from April 1.

Technical analysis paints a grim picture. Moving averages—both short-term (20-day) and long-term (50-day)—are in a “sell configuration,” with the 50-day average (¥11,424.86) above the 20-day (¥11,238.57). A MACD buy signal from the 3-month window is outweighed by broader downward momentum. Key resistance at ¥11,240 (April’s high) and support at ¥10,990 (a volume-accumulated level) suggest further declines if the latter breaks. Analysts have downgraded the stock to a “Sell Candidate,” forecasting a -5% drop over three months, with a price target as low as ¥10,201 by August 2025.

Broader Implications

The Nidec-Makino clash reflects Japan’s evolving corporate governance landscape. While poison pills are rare in Japan compared to the U.S., Makino’s use of one highlights growing assertiveness by targets to resist unsolicited bids. This case underscores two critical points:
1. Hostile Takeovers Are Riskier in Japan: Unlike the U.S., where courts often favor bidder-friendly rules, Japan’s legal framework leans toward protecting incumbent management. Makino’s success in deterring Nidec sets a precedent for future battles.
2. Strategic Mergers vs. Market Sentiment: Nidec’s vision of a global machine tool giant failed to sway investors, who now price Makino’s shares based on standalone prospects. The FTC’s approval, while validating the deal’s antitrust merit, couldn’t overcome governance hurdles—a reminder that regulatory clearance alone doesn’t guarantee success.

Conclusion: A Bearish Outlook Anchored in Technicals and Governance

Makino Milling’s shares face significant headwinds. The stock’s 4.15% decline since April, coupled with a 4.56% drop from its April 18 peak, signals investor skepticism about its post-takeover prospects. Technical indicators point to further downside:跌破 ¥10,990 could trigger a free fall toward ¥10,200, while resistance at ¥11,240 remains formidable.

The Nidec-Makino saga also illuminates Japan’s corporate governance realities. While poison pills may deter hostile bids, they risk alienating shareholders who view such measures as defensive overreach. For now, Makino’s independence is preserved, but at the cost of prolonged volatility and a stock price reflecting diminished investor confidence.

In this battle, both sides claimed victory—Makino retained control, while Nidec avoided a costly misstep. For investors, the lesson is clear: in Japan, hostile takeovers remain a high-risk game, and technical sell signals, not just corporate strategy, will dictate Makino’s next move.