J. Front Retailing Co. said Thursday it will launch a tender offer for Parco Co. to raise its equity stake in the shopping center operator to more than 50 percent and make it a subsidiary.
The takeover bid will start Monday and last through Aug. 20. The firm said it will buy up to 65 percent of the outstanding shares in terms of voting rights. The offering price is ¥1,100 per share.
J. Front, the operator of Daimaru and Matsuzakaya department stores, hopes to improve its profitability by obtaining a controlling stake in Parco, which is popular among young people, sources said. J. Front is already the top shareholder of Parco with a 33.2 percent stake
Combined consolidated sales at the two firms in the year that ended in February stood at about ¥1.203 trillion, close to the ¥1.239 trillion leading Japanese department store operator Isetan Mitsukoshi Holdings Ltd. earned in the year to March 2012.
Last month, J. Front and Parco started discussions on store development and measures to attract customers. A major focus will be how major retailer Aeon Co., the second-largest Parco shareholder, and Credit Saison Co., the third-largest shareholder, will respond to the planned tender offer, industry sources said.