Don Quijote shocks Origin by boosting stake to 46%

Don Quijote Co. made a surprise announcement Wednesday that it had acquired a 15.28 percent stake in Origin Toshu Co., refusing to give up its quest for the chain of 24-hour boxed-meal stores.

The reversal came after a takeover bid launched by the discount retailer last week failed in the face of a better offer from retailing titan Aeon Co., which has offered to be a white knight for Origin. Aeon’s offer is to end March 1.

Don Quijote said it holds a 46.21 percent stake in the firm and hopes it can acquire Origin to usher in a new age of convenience.

“The purpose of our additional acquisition of Origin Toshu shares is to expeditiously realize ‘next-generation convenience stores’ by increasing our commitment to its management,” Don Quijote said in a statement.

The discount retailer said it plans to bring its total holdings in Origin to 51 percent, after saying last week it had no plans to launch another TOB.

On Friday, Don Quijote announced that its TOB failed because it only managed to attract one Origin shareholder, who agreed to part with 100 shares.

Don Quijote launched its surprise bid for partner Origin on Jan. 16. Origin’s management balked at the hostile bid, saying it had been kept in the dark, and sought help from Aeon, which agreed to launch a friendly TOB with an offer of 3,100 yen per share, compared with Don Quijote’s 2,800 yen.

In Wednesday’s statement, Don Quijote said it did not try to outbid Aeon because countermoves might trigger a “money game” and bring turmoil to the market.

The latest move is likely to trigger a strong reaction.

Earlier Wednesday, Origin sent Don Quijote a letter of inquiry, asking whether it had made additional acquisitions since the TOB failed.

Origin warned that it would notify authorities if it determines that the way the shares were purchased violated the Securities and Exchange Law or other regulations.

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