Japan's Bull-Dog OK's poison pill for Steel Partners

TOKYO, June 24 (Reuters) - Shareholders of Japan's Bull-Dog Sauce (2804.T) on Sunday approved a "poison pill" scheme that will allow the sauce maker to issue new shares in an attempt to thwart a $260 million takeover attempt by U.S. hedge fund Steel Partners.

If enacted, it would be the first time in Japan that a company has used an anti-takeover defence to dilute a would-be acquirer's stake. Steel Partners is seeking a court injunction to prevent use of the poison pill.

At a general shareholders' meeting on Sunday, more than two-thirds of votes were cast in favour of the scheme that would give shareholders other than Steel Partners three new shares for each existing one, while paying Steel Partners in cash.

Steel Partners's unsolicited tender offer for Bull-Dog is one of several fights the activist fund is waging in Japan. It has spent about $3 billion to take stakes of more than 5 percent in some 30 Japanese firms.

The Bull-Dog case underscores Steel Partners' uphill battle to win over a public largely suspicious of its intentions. Its tactics have been criticised in the domestic press and a senior government official has said it was similar to a greenmailer.

"No matter what you say about the principals of capitalism, it should not be acceptable for a fund to carry out mischief like this on a such a quality firm," said one male shareholder at the meeting, throwing his support behind Bull-Dog's board.

The management of Bull-Dog, which makes a variety of popular sauces for pork, meat and Asian cuisine, has remained staunchly opposed to Steel Partners' advances even after the fund sweetened its offer by 7 percent to 1,700 yen per share on June 15.

Bull-Dog's stock closed on Friday at 1,681 yen.

A representative for Steel Partners grilled Bull-Dog President Shoko Ikeda during the three-hour meeting, including a question on why it didn't use the 2.3 billion yen needed to dilute the fund's stake to bolster its core business instead.

Ikeda said the scheme, which will whittle Steel Partners stake to just under 3 percent from about 10 percent now, was necessary to protect the core values of the 105-year-old firm.

"Steel Partners is an investment fund that gains a profit by trading stocks," Ikeda told a news conference after the meeting. "We are a manufacturer that looks to get a return on invesment from a long-term perspective. There is a difference there."