But the management of Myojo was not pleased with the American bid. President Hironobu Nagano complained about "gaiatsu", a phrase meaning foreign pressure. The offer did drive the stock up by 13%, closing at 776 yen, but that just made it more expensive for Myojo to buy back their own stock to protect themselves. Clearly Myojo needed someone more "acceptable" than the Americans and who could also pay more than the Americans were offering.
Myojo management found their sugar daddy, their White Samurai, in Nissin Foods, the largest maker of instant noodles in the world and the inventors of Top Ramen. Nissin jumped the offer to 870 yen per share for 33.4% of Myojo's outstanding stock, or about the same percentage the Americans were seeking to buy. But unlike the Americans, Nissin promised not to interfere with Myojo management. Myojo management was ecstatic and immediately accepted the offer. That drove the stock up another 13% to 861 yen, before settling back to 773. Everything seemed to be turning up water lilies for Myojo management.
But not so much for Steel Partners Japan Strategic Fund.
The Americans have until December 14th to beat the Nissin bid, but they've already tgotten the message; keep your hands off our noodles. In effect Myojo and Nissin have been performing a little morality play that ought to be familiar to any Americans who remember last February when an arm of the government of the United Arab Emirates that owned an English management company tried to buy the rights to several American ports but got turned down at the last minute because the Americans decided they didn't trust a bunch of Arabs to control their ports of entry.
Okay, there were attacks on America by Arab terrorists, while we have no similar history of attacking the Japanese. I mean, it's not like we dropped a nuclear bomb on them or anything. But what is the difference between dominating the world noodle market and just dominating the world? Could one logically lead to the other?
I'm sure there are good sound economic reasons why we don't want our ports controlled by Englishmen working for Arabs, and perfectly good reasons why the Japanese don't want their noodles controlled by Japanese who are working for Americans, although I honestly can't figure out what the hell those reasons might be; its noodles, for crying out loud. But you can't expect people to be sensible about losing control of anything, their ports of entry or their noodles. But what is really the point?
While defending the monopoly the merger of these two noodle giants will represent , Corporate President Nagano confessed, "When most of the makers are trying to cut down the price (of noodles), it is difficult to raise prices or put up a monopolistic price." In other words Nissin is about to pay several billion yen for an even bigger share of an industry caught in a downward price spiral.
And is America really more secure now that the Arabs are not managing our ports, but our trade deficit is still running about $600 billion a year? Did we spend too much energy worrying more about who was counting the shipping containers coming into our ports and not enough time worrying about how many there were?
At this point our national debt resembles a credit card bill, where we're not even paying down the interest, just meeting the minimums. We can't keep that up indefinitely.
In other words, are we focused on that we ought to be focused on? Or are we letting ourselves be distracted by the noodles so that we miss real soup that we're in.
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