(Bloomberg) -- Japanese trading giant Itochu Corp.’s tender offer to acquire FamilyMart Co. in 2020 was too cheap, a Tokyo court said, handing a rare victory to activist shareholders who fought for a higher price.

The Tokyo District Court’s March 23 ruling, which came after two years of investigations, said the offer price of ¥2,300 per share ($17) should have been 13% higher at ¥2,600, according to a court document reviewed by Bloomberg News. U.S. activist investor RMB Capital had petitioned for a higher price, calling the offer “significantly unfair.” Hong Kong based Oasis Management had also filed a petition saying it was made at a “significant discount.”  

A FamilyMart spokesperson declined to comment on the ruling.

While Itochu’s acquisition of FamilyMart can’t be reversed, the ruling means FamilyMart will have to pay an extra ¥300 per share to shareholders who had sought a higher price. Those who did not file petitions are not subject to receive the extra sum.

Related parties have the option to appeal to the court within two weeks of the ruling.

Itochu acquired FamilyMart in 2020 through a tender offer to buy shares in the convenience store operator that it didn’t already own. Itochu has said its total stake in FamilyMart will rise to 65.7% from 50.1% after completing the tender offer. But the offer price was set below the range of ¥2,472 to ¥3,040 estimated by the special committee reviewing the deal, triggering complaints from activist shareholders. 

“The ruling is significant in that it acknowledges how the special committee failed to protect the rights of minor shareholders,” Masakazu Hosomizu, a portfolio manager at RMB, told Bloomberg News in an interview after the ruling. “This will serve as a precedent and prevents parent companies from trying to force acquisition of its affiliates through tender offers.”

RMB petitioned for ¥2,600 apiece, which would have valued FamilyMart at ¥1.32 trillion yen. 

The decision comes as another Japanese giant, technology firm Toshiba Corp., earlier this month agreed to sell for ¥4,620 a share to a consortium led by private equity firm Japan Industrial Partners Inc. The $15 billion tender offer is scheduled to begin around late July, with a share price that fell below investors’ expectations.

(Updates to add FamilyMart comment in third paragraph. An earlier version of the story was corrected to say FamilyMart, not Itochu, will have to pay extra ¥300 per share in fourth paragraph, and to remove Itochu in deck head and in fifth paragraph.)

©2023 Bloomberg L.P.