Steel raises Sapporo offer but drops goal to one-third


U.S. hedge fund Steel Partners said Monday it will raise its offer price for shares in Sapporo Breweries Ltd., the nation’s third-largest brewery, to ¥875 per share to gain 33.3 percent of the company.

Regarding the new proposal, Steel Partners Japan Strategic Fund (Offshore) L.P., said in a letter sent to Sapporo the same day that it requests negotiations with the brewery’s board of directors.

The latest proposal includes a correction to Steel’s proposal on Feb. 15, 2007, that it would launch a tender offer at ¥825 per share to raise its stake in Sapporo to 66.6 percent if Sapporo’s board of directors approved the move.

Sapporo’s board of directors last month turned down the takeover proposal, citing its advisory panel’s judgment that it would be detrimental to the interests of Sapporo shareholders.

“We believe that all of the company’s (Sapporo’s) stakeholders would benefit from meaningful negotiations between the company and SPJSF to enable it to increase its stake to 33.3 percent of the company’s outstanding voting rights,” Warren Lichtenstein, managing partner of Steel Partners Japan, wrote in the letter.

Steel Partners is Sapporo’s largest shareholder, with 17.52 percent of outstanding shares.

Steel Partners said the increased proposed purchase price is based on its analysis of Sapporo’s revised medium-term plan for 2008 to 2009, released last month, and other information publicly available.

It also said it reduced the proposed stake to 33.3 percent to respond to Sapporo’s concerns that Steel Partners is seeking a controlling position.

Lichtenstein said he wanted to avoid “unnecessary damage” caused to Steel Partners Japan and other stakeholders, as happened in the case of Bull-Dog Sauce Co., which launched defensive measures against a Steel Partners takeover bid that resulted in a 45 percent drop in shareholder value.

Bull-Dog Sauce in August carried out a poison pill takeover defense against the U.S. fund’s buyout bid.