Aug. 24 (Bloomberg) -- Warren Lichtenstein's Japanese fund failed to win control of Bull-Dog Sauce Co. after receiving tenders for 1.89 percent of the condiments maker's common stock, it said in a statement today.

The outcome for Steel Partners Japan Strategic Fund (Offshore) L.P., which offered to buy the Tokyo-based condiment maker at a value of 32.3 billion yen ($278 million), came as no surprise after shareholders voted overwhelmingly in June to back the board's anti-takeover steps. The fund also lost a legal challenge to the defenses.

Steel Partners has made a series of failed takeover bids in Japan since 2003 and invested in more than 40 companies, including Sapporo Holdings Ltd., seeking management changes and higher dividends. While the fund has made money, acquisition attempts have been thwarted as Japanese firms turn to defenses including poison pills and friendly tie-ups.

``Japan's star on the global investable universe continues to fall,'' said Kirby Daley, a strategist at Societe Generale Group's Fimat unit in Hong Kong. ``The impetus for foreign investors to highlight the country as an investment destination wanes with it.''

The fund will review Bull-Dog's business plan and its spending on takeover defenses, it said in the statement today.

Takeover Opposed

Bull-Dog hired Nomura Holdings Inc. as its adviser and opposed Steel Partners, saying the fund had no experience in running a Japanese company and that it would take steps to block the takeover bid.

Lichtenstein said in a statement in June the defense scheme ``would be detrimental to the legal framework of corporate Japan'' and ``will not only deter investment in Japanese companies but also undermine Japan's efforts to become a global financial center.''

Bull-Dog shares have declined 74 percent since June 28, when Steel Partners was turned down in its bid to block a warrants issue that treated the fund differently from other shareholders.

The Tokyo High Court termed Steel Partners an ``abusive acquirer'' in letting Bull-Dog go ahead. Japan's Supreme Court backed the refusal to prohibit the takeover defense.

Bull-Dog allowed all shareholders except Steel Partners to convert warrants it issued into common shares, a move that cut the fund's stake to less than 3 percent from 10 percent.

Following the Aug. 7 Supreme Court ruling, Steel Partners adjusted its bid to 425 yen a share, a quarter of the earlier 1,700 yen offer, to account for the warrants.

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: August 23, 2007 21:47 EDT