Minebea Raps Charles Knapp in Takeover Fight
Reaffirming his determination to resist a hostile takeover of his company, Takami Takahashi, president of Minebea Co., suggested Monday that neither Los Angeles-based Trafalgar Holdings Ltd. nor its chairman, Charles W. Knapp, is competent to manage Minebea or even to dispose of its assets.
Takahashi also told the Foreign Correspondents Club here that his company will use its sales to Japan’s Defense Agency as an argument that the joint takeover attempt by Trafalgar and Glen International Financial Service Co. of London should not be permitted.
His emphasis on Minebea’s military business indicated that Takahashi is counting on the Japanese government to be his final line of defense against the first-ever attempt by foreign companies to take over a Japanese firm with a hostile bid.
Himself a “heretic” advocate of corporate takeovers in a country that scorns such a practice, Takahashi expressed regret that the first such foreign attempt had come from what he called a “shameless” corporation whose chairman faces “more than 15 lawsuits” in the United States. Most of the suits relate to Knapp’s management of Financial Corp. of America, parent of the largest savings and loan company in the United States. Knapp was chairman of FCA until August, 1984, when he was forced to resign by banking regulators who felt that FCA’s lending practices were reckless.
Calling Knapp a businessman who “is not a good person,” Takahashi cited the “lavishness of Mr. Knapp’s managerial style” as evidence that a takeover would be bad for Minebea. After Knapp left FCA, he noted, the firm sold off “nine aircraft, 41 apartments and 475 automobiles” that Knapp had maintained for company use.
A statement issued by Minebea after Takahashi’s speech also quoted him as saying that “Minebea is aware of nothing in Mr. Knapp’s record that warrants confidence in his ability to manage competently the disposition, much less the operation, of Minebea assets.”
Of Knapp’s company, Takahashi said: “Trafalgar does not have a good reputation and is not an industrial company. It is just an investing company. We are a manufacturing company.” A takeover by Trafalgar, he added, would drive down the value of Minebea’s shares.
In a phone interview, Trafalgar Executive Vice President Mark Dodge said: “They’re doing everything possible to discredit our bid in every conceivable way. We’re not interested in debating what happened at FCA. What happened happened. It’s not relevant (now).”
Dodge said Knapp is just one of many defendants in the lawsuits, some of which he called frivolous. He said Knapp and his lawyers contend that the suits are without merit.
In a statement issued late Monday, Knapp said: “I am regretful that Mr. Takahashi has decided to question our ability to manage Minebea. In my opinion, this is not an issue in the transaction, as we do not intend to be involved in operations after acquiring ownership of the company.”
Handguns, Bomb Racks
Knapp accused Takahashi of engaging in a “destructive corporate expansion program” and showing “a blatant disregard for the rights of shareholders.”
Takahashi’s warning that Minebea would look to the government for support in its fight against the takeover was the first revelation that Minebea sells handguns, precision ball bearings, rod end bearings, bomb racks and aircraft parts. Military sales, he said, amount to 10% of the firms’s sales.
“That is a very big percentage. Even Mitsubishi Heavy Industries (Japan’s leading defense supplier) doesn’t sell 10% of its production (to the Defense Agency),” he said.
Minebea parts are used in the licensed production in Japan of F-4, F-15 and P-3C aircraft, he added. Takahashi noted that Trafalgar and Glen had proposed to divest Minebea of its defense business after assuming control of the company, which operates 11 factories in the United States through subsidiaries. But he called such a proposal impractical. Separate production of items sold to the Defense Agency, he said, would wipe out the benefits of mass production.
“(Japan’s) Foreign Exchange Control Law (which regulates takeovers of defense-related industries) . . . will surely serve as a major barrier to their takeover bid,” he declared.
Times staff writer Tom Furlong contributed to this article from Los Angeles.
