Konaka Co., Japan's fourth-largest menswear chain, said Tuesday it will not sell its stake in Futata Co. to Aoki Holdings Inc., No. 2 in the industry, which is trying to take over the smaller firm.
Konaka is the largest shareholder of Futata, a regional Kyushu chain, with a stake of about 20 percent.
Aoki said Monday it will launch a public tender offer to acquire all of Futata's outstanding shares to make it a wholly owned subsidiary, and asked Futata to respond to the proposal by next Monday.
Aoki set its offer price at 700 yen a share, well above Futata's market price of around 400 yen, and said it will go ahead with the takeover bid if Futata agrees on the takeover plan.
Konaka and Futata formed a business and equity tieup in January 2003.
"We intend to strengthen our alliance with Futata, also in terms of capital. There is no way that we will respond to a tender offer," Konaka Managing Director Takashi Numata said Tuesday.
Numata said he could not comment on what measures Konaka would take if Aoki moves ahead with the takeover bid.
Kenji Nakamura, executive managing director of Aoki, indicated that even if Konaka does not respond to the tender offer, Aoki will try to acquire all of Futata's shares through a stock swap.
Nakamura said whether Aoki will go ahead with the tender offer "depends on Futata's response. Konaka's intentions do not matter."
Futata said Monday it will thoroughly study Aoki's proposal before responding.
Aoki President Hironori Aoki made the proposal Sunday to Futata President Takafumi Futata.