July 19, 2017 / 8:32 AM / 3 months ago

UPDATE 1-Court rejects Idemitsu family's appeal to block share issue

(Recasts with family confirming ruling, adds family comments in paragraph 5.)

TOKYO, July 19 (Reuters) - The Tokyo High Court on Wednesday rejected an appeal from founding family of Japanese oil refiner Idemitsu Kosan Co to block the company from issuing new shares, the family’s lawyers said.

The High court ruling upheld a lower court decision on Tuesday that rejected a petition by the family to stop Idemitsu, Japan’s second-biggest refiner, from selling $1.1 billion in new shares. The sale was scheduled to finish on Thursday.

Selling the shares would clear the way for Idemitsu to take over competing refiner Showa Shell Sekiyu.

The descendents of Idemitsu founder, Sazo Idemitsu, have been locked in a battle with the Japanese refiner’s management for more than a year over the proposed Showa Shell buyout. The new share sale would dilute the family’s stake and make it harder for them to oppose the deal.

“The court rulings are unjust, overlooking the fact that the main objective of the new share issue was to dilute (the founding family‘s) stake and we deeply deplore them,” the family’s lawyer said in a statement, adding they will continue to oppose management’s plan to merge with Showa Shell.

The High Court decision was earlier reported by Nikkei business daily.

Idemitsu Kosan officials were not immediately available for comment.

$1 = 112.0600 yen Reporting by Osamu Tsukimori and Taiga Uranaka; Editing by Chris Gallagher and Christian Schmollinger

Our Standards:The Thomson Reuters Trust Principles.
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