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Steel Partners Eyeing Options After Tokyo Court Ruling

With Monday's decision by the Tokyo High Court allowing Bull-Dog Sauce to issue stock warrants as a takeover defense, U.S. investment fund Steel Partners is believed to be weighing its next actions.

The fund could file a special appeal with the Supreme Court that examines constitutional violations. But to challenge a legal interpretation, Steel Partners would have to obtain approval from the Tokyo High Court.

With the lower courts having rejected Steel Partners' assertion that Bull-Dog's stock warrant issuance violated principles of shareholder equality, most believe that the fund's claims would be tossed out by the Supreme Court as well.

Another option available to the fund is the withdrawal of its tender offer for Bull-Dog shares before the Aug. 10 deadline. The fund is offering 1,700 yen apiece, but the stock price has fallen sharply as the market prepares for a flood of new shares after the warrants are issued.

On the other hand, Steel Partners may decide to continue its tender offer for the Bull-Dog shares. But because the fund would sustain losses at the 1,700 yen price, it would likely lower the price.