Seibu Holdings Inc. said Tuesday it opposes a takeover bid by its top shareholder, U.S. private equity firm Cerberus Capital Management LP, because the move could undermine the railway and hotel operator’s corporate value.
Referring to Cerberus’ proposed tender offer to raise its stake to more than one-third, Seibu Holdings President Takashi Goto told a news conference, “We will miss an opportunity to relist on a bourse if the takeover bid is conducted when the market environment is turning favorable.”
A Cerberus spokesman said “it is regrettable that Seibu has expressed a negative opinion of our proposal.”
Goto said Cerberus “has recently been making unreasonable requests by pursuing its own benefit and taken an uncooperative stance about relisting,” though he thought Cerberus also wanted Seibu to become a listed company at an early date.
Last October, Cerberus proposed that Seibu consider such options as terminating unprofitable lines and selling the Seibu Lions baseball team, according to Goto.
Such a proposal “lacks medium- to long-term perspectives and could undermine our corporate value,” he said.
Seibu Holdings also opposes a Cerberus proposal to nominate three candidates to the Seibu board. It said it could harm its corporate value in the long term if the Cerberus group exerts more influence on its management in the future.
Earlier this month, the Cerberus group said it would conduct a tender offer from March 12 to April 23 to raise its stake in Seibu Holdings to more than one-third, a ratio that would give the New York-based company power to veto major board proposals at shareholders’ meetings.
“We will continue to purchase Seibu’s shares through the tender offer and propose the election of additional directors in order to provide benefits to all stakeholders by improving the corporate governance and internal controls and enhancing management’s transparency within Seibu,” the Cerberus spokesman said.
Cerberus has been at odds with Seibu Holdings over a plan to relist on the Tokyo Stock Exchange soon out of fear the offering price will be set at a level the U.S. company sees as unreasonably low.
Seibu Railway was delisted in 2004 for falsifying financial statements and Seibu Holdings has been pursuing reforms to become a publicly traded company again. Seibu Railway shares have been exchanged for Seibu Holdings shares.