TOKYO, Aug 13 (Reuters) - Singapore-based hedge fund 3D

Investment Partners sought a court injunction on Thursday to

block Japanese drug wholesaler Toho Holdings' takeover

defence, challenging the growing use of 'poison pill' strategies

against activist investors.

The request to the Tokyo District Court could test whether

companies can deploy such defences against activist shareholders

who are not seeking control in Japan, the world's second-largest

market for activist campaigns after the United States.

Toho's largest shareholder, 3D is seeking to raise its stake

to 27% from 24% but faces a poison pill provision that would

trigger a discriminatory warrant issuance designed to dilute its

holding if it acquires additional shares.

Shareholders backed Toho's proposal authorising the measure

with 54.7% support at the annual general meeting in June.

In a statement, 3D said it had no intention of acquiring

management control, as a 27% stake falls short of a level Toho

has said would confer effective veto power.

Therefore the prerequisite for triggering the measure, a

threat to management control, does not exist, it said.

Toho, however, told shareholders ahead of the June meeting

that a stake of 27% would allow 3D to exert significant

influence over management and potentially pressure it to

prioritise short-term gains.

ANTI-ACTIVIST PILLS

Japan's anti-takeover defences were once dominated by

"pre-warning" poison pills adopted before a specific bidder

emerged, but their use waned after governance reforms under

former Prime Minister Shinzo Abe boosted scrutiny of shareholder

voting.

More recently, however, contingency-based poison pills

targeting specific investors have increasingly been used.

Advisory firm IR Japan says a record of 10 such measures

were adopted last year, often to prevent activist funds from

raising stakes beyond roughly 20%, a level some companies argue

can confer significant influence.

Government takeover guidelines permit poison pills aimed at

giving shareholders time and information to assess a buyout bid.

However, critics say that such measures used against

investors who are not seeking control risks entrenching

management and undermining efforts to boost corporate

governance.

Allowing such defence measures could weaken the disciplinary

pressure on management from capital markets, said Manabu

Matsunaka, a professor at Nagoya University Graduate School.

"If management is confident its own strategy is right, it

should devote its resources to explaining that strategy to

shareholders, rather than seeking support for defense measures,"

he said.