Supermarket chain Aeon Corp. said Monday it may raise its stake in CFS Corp. after it blocked a takeover of the drugstore chain six weeks ago.
The companies are in talks, CFS said in a statement to the Tokyo Stock Exchange in response to media reports that Aeon would increase its stake to 33 percent from 15 percent.
Aeon rallied investor support to stop the ¥11.1 billion takeover of CFS by Ain Pharmaciez Inc. in January as it sought to expand its own alliance with CFS. Aeon wants to increase its share of Japan's pharmacy market ahead of a law change next year that will allow the nation's grocery and convenience stores to sell some over-the-counter drugs.
CFS shares gained 7.2 percent to ¥520 at the 3 p.m. close on the Tokyo Stock Exchange. Aeon declined 5.2 percent to ¥1,215.
CFS Chairman and President Kenji Ishida, who promoted the merger with Ain, will retire and be replaced by his son, Takehiko, as part of a plan for Aeon to increase its stake, the Nikkei business daily reported Sunday.
By gaining a one-third stake, Aeon would have the power to veto major decisions at shareholders' meetings for the chain, which operates about 250 drugstores and 27 supermarkets.
CFS had spurned offers to expand the companies' relationship over many years, Aeon Senior Managing Executive Officer Masaaki Toyoshima said in December.
CFS last year rejected a proposal to form an alliance with two of Aeon's affiliates to cooperate on product procurement and development.
Aeon, which acquired its holding in CFS in 2000, has stakes in a range of Japan drugstores.