Some recent headlines in Tokyo suggest a turning back of the
clock in Japan's nascent market for corporate control. In one
case, Matsushita's exclusive negotiation period with TPG over a
potential sale of Matsushita subsidiary JVC expired without an
agreement amid open efforts by JVC management to prevent the
sale. Matsushita was then widely rumored in late June to have
agreed an alternative business combination between JVC and
former suitor Kenwood Corporation. The reported transaction
would be a staged one, however, with an initial equity
investment in JVC by Kenwood to be followed by the
establishment of a joint holding company in 2008. Use of a
joint holding company structure has become a common method in
Japan of achieving a defensive business combination while
postponing a true integration of operations.