Trust-type rights plan

Focus has increased on measures to protect against hostile takeovers, such as lifting the ban on so-called triangular mergers, with growing expectations for "trust-type rights plans" as a measure for using trusts to protect against hostile takeovers.
Trust-type rights plans involve the issuance of share options by the company that issues shares to a special purpose company (SPC). The SPC can utilize a method whereby it establishes a trust as the settlor, or it can utilize a direct trust method whereby the issuing company directly issues the share options to the trust.
Under both systems, when a hostile buyer emerges, share options can be issued to all shareholders other than the hostile buyer, and the proportion of voting rights held by the hostile buyer can be reduced by exercising such share options.
To prevent a company's management from using this "trust-type rights plan" for their own purposes, an independently managed third-party organization is established, and the board of directors recommends whether to mobilize the trust-type rights plan after determining whether the proposed buyout plan would lead to a loss of corporate value or shareholder value.

System for trust-type rights plan (direct trust method) (case study)