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<\/a><\/a>\nToday, 3D published a comprehensive White Paper in presentation format (\u201cPresentation\u201d) calling on shareholders to vote AGAINST Toho HD\u2019s Proposal 4 (Gratis allotment of stock acquisition rights) at the upcoming 78th Annual General Meeting of Shareholders (\u201cAGM\u201d) to be held on June 26, 2026. Proposal 4 asks shareholders to approve the implementation of takeover defense measures (the \u201cPoison Pill\u201d).<\/p>
\nPresentation \u201cEntrenchment Over Corporate Value: An Examination of Toho Holdings\u2019 Poison Pill\u201d:\n \nTo ensure all shareholders are fully informed, 3D has also launched a dedicated website compiling all related disclosure materials to date, alongside an explanatory manga (comic) tailored for individual shareholders.<\/p> \nDedicated website \u201cCreating Corporate Value at Toho\u201d:\n \nManga (comic) shipped to individual shareholders \u201cToho HD\u2019s Current Situation in 5 Minutes\u201d (Japanese only):\n \nKey Points Detailed in the Presentation:<\/span><\/b><\/p> \nAs detailed in the Presentation, Toho HD\u2019s Board introduced the Poison Pill in October 2025\u2014without obtaining prior shareholder approval\u2014only two months after 3D shared written statements<\/a> obtained through a formal, sanctioned inspection of case records, which surfaced incumbent management\u2019s involvement in systemic compliance breaches. As these statements directly informed the governance concerns that 3D had been engaging with for years, 3D shared this information, yet the Board responded by abruptly terminating dialogue and introducing the Poison Pill. 3D believes that invocation of the Poison Pill is inappropriate for the following reasons:<\/p> \n1. The Poison Pill Defends Against No Threat Under the Established Framework<\/b><\/p> \n3D has consistently communicated to Toho HD that it has no intention of seizing management control. Prior to the introduction of the Poison Pill, 3D voluntarily submitted<\/a> a draft of a legally binding written pledge to cap its voting rights at a maximum of 30%.<\/p> \nHowever, Toho HD declined to receive the pledge and refused to discuss its content. Without disclosing the existence of this pledge to its shareholders, Toho HD introduced the Poison Pill two months later. In response, 3D further demonstrated its commitment by voluntarily capping <\/a>its post-acquisition voting rights ratio at 27% (inclusive of existing holdings). This revised cap is intentionally set below both the mandatory TOB threshold (30%) and Toho HD\u2019s own alleged veto-power level (27.17%) to eliminate any purported concerns regarding a seizure of management control.<\/p> \nFurthermore, throughout its investment history, 3D has never engaged in any actions that could damage corporate value or the common interests of other minority shareholders [2]. Specifically, regarding Toho HD, 3D's extensive engagement has been designed with deep respect for, rather than disruption of, the company\u2019s crucial role as a social infrastructure, without any intention of forcing its proposals [3]. To ensure maximum market clarity, 3D has voluntarily disclosed <\/a>to shareholders several hundred pages of materials to provide absolute transparency and eliminate any potential pretext of \"coerciveness\" [4], including:<\/p> \nOn the other hand, Toho HD has withheld 3D\u2019s full comprehensive responses to the shareholders to date, with the Board selectively extracting fragments out of context to construct a misleading narrative and justify the invocation in its April 28 and May 8 materials.<\/p> \nConsequently, under the established framework in Japan\u2014where the legitimacy of a Poison Pill requires the genuine threat of management control seizure, impairment of corporate value, and structural coerciveness [1][4]\u2014this Poison Pill is inherently unnecessary. Additional share acquisition by 3D do not pose any risk of management control seizure, nor do they impair corporate value and the common interests of shareholders. Furthermore, 3D's proactive, exhaustive disclosures have effectively ungrounded any potential concerns regarding coerciveness.<\/p> \n2. The Board Lacks Independence to Prevent Management from Abusing the Poison Pill<\/b><\/p> \nOf even greater concern is that the majority of Toho HD\u2019s Board seats are occupied by non-independent directors. The Board, which retains ultimate decision-making power over any recommendations made by the Independent Committee, fundamentally lacks the independence required [5] to prevent management from abusing the Poison Pill.<\/p> \n3D is deeply concerned that the true motive behind this unnecessary Poison Pill is to insulate incumbent management\u2014whose tacit approval of or involvement in bid-rigging was recently surfaced by 3D\u2014from accountability, effectively acting to entrench itself.<\/p> \n3. Endorsing Entrenchment Would Impair Management Discipline and Corporate Value<\/b><\/p> \nIf the invocation of the Poison Pill is approved at the AGM, this management entrenchment will receive a formal endorsement. This will inevitably result in a severe loss of managerial discipline, ultimately impairing Toho HD\u2019s corporate value and the common interests of shareholders.<\/p> \nIndeed, since the Poison Pill was introduced, Toho HD\u2019s share price has significantly underperformed both TOPIX and its peer average (Figure 1), demonstrating that the market views the Poison Pill as value-destructive.<\/p> \nMoreover, several recent developments further heighten the concern that invoking the Poison Pill would erode management discipline. Most of the numerical targets in the new medium-term management plan announced on April 28 by current executives merely maintain recent results or recycle targets from the previous, underachieved medium-term plan. Additionally, the latest financial results and earnings forecasts announced on May 13 were disappointing, falling well below analyst consensus.<\/p>\n