An investment arm of SoftBank has launched a surprise “white knight” offer for a Japanese hotel chain as investors witness a rare spate of hostile takeovers and other corporate manoeuvres once deemed taboo in the country.
The friendly buyout offer of up to $1.3bn from Softbank’s Fortress Investment Group for Unizo Holdings came after travel agency HIS launched a hostile takeover attempt of the hotel group last month.
Fortress, which has invested in more than 100 hotels in Japan, has offered ¥4,000 ($38) a share for all of Unizo’s shares. This represented a premium of 11 per cent compared with Thursday’s closing price and a premium of 101 per cent compared with the level shares were trading a day before HIS announced its offer for ¥3,100 a share on July 10.
The embittered tussle for control of Unizo Holdings comes as Japan’s real estate investment trust sector is awaiting the finale later this month of a hostile takeover bid — unprecedented for the sector — by Star Asia, which has a Tokyo-listed Reit, of its smaller rival Sakura Sogo.
The two hostile takeover battles follow examples in recent months in which major shareholders applied unusually aggressive tactics to the management of a stationery supplier, a funeral director and sportswear manufacturer.
The battles follow an upsurge in the presence and boldness of activist investors in Japan not seen for years in the country.
The tussle over Unizo, which comes in the wake of revived foreign investor interest in the Japanese property market, could yet become even more intense with activist fund Elliott recently revealing that it had built a stake of 9.9 per cent in Unizo.
Elliott’s interest has already triggered a spike in Unizo share price, which rose 16 per cent to ¥4,165 on Friday. HIS said it was studying Fortress’s new offer and declined to comment on what step it could take next.
Japan’s Reit sector has been rocked by Star Asia’s attempt to take over the Sakura Sogo Reit by calling on unit holders to switch asset managers. Sakura’s response has been to negotiate with the managers of the much larger Mirai Reit to enter as a white knight with a separate proposal.
Hostile takeover activities have been effectively absent from Japan for more than a decade after a spate of attempts in the late 2000s ended with huge public outrage and the high-profile convictions of the investors leading the bids.
