• Bloomberg


Unizo Holdings Co.’s latest takeover offer is seen raising the bar for Blackstone Group Inc., which has been the most persistent bidder in the war for the Japanese real estate operator.

Unizo backed a takeover offer made by its employees in partnership with Lone Star Group worth ¥174.4 billion ($1.6 billion), saying in a statement Sunday that the offer price of ¥5,100 per common share is above proposals made by other bidders. The stock rose as much as 6.1 percent to ¥5,200 in Tokyo on Monday.

Unizo has been caught in a rare battle among global investing behemoths since a travel agency operator launched a surprise tender offer in July. Fortress Investment Group and a number of other investment firms joined the fray before Blackstone came in with an offer of ¥5,000 per share. Unizo has withheld support for that offer as it became clear that management was getting cold feet about an outright sale.

“The Lone Star transaction now sets a deliverable benchmark for the stock — and there remains the possibility that Blackstone or Fortress could return with a similar transaction structure at a higher price,” said Justin Tang, head of Asian research at United First Partners, an investment and advisory group that specializes in special situations. The fact that the stock “is trading slightly through the terms is a reflection of investors’ expectations.”

Such acquisitions have hardly ever been attempted in Japan because shareholders traditionally support incumbent management. Unizo’s top shareholder, Elliott Management Corp., has supported the talks with Blackstone.

Unizo’s board has recommended its shareholders accept the latest proposal, made as a tender offer through Tokyo-based Chitocea Investment Co. Lone Star, a U.S. private equity fund, holds 27 percent in Chitocea and will provide the necessary funding, according to Unizo. The remaining 73 percent is owned by an entity that was created by Unizo Group employees.

“With Unizo on board, it’s a step forward from the deadlock we’ve been seeing,” said Daisuke Fukushima, an analyst at Nomura Holdings Inc., adding that the company could still see more hostile takeover bids.

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