Business / Corporate

Itochu planning ¥600 billion bid for Japan’s FamilyMart chain

Bloomberg

Itochu Corp. is planning to take full control of convenience-store chain FamilyMart Co. through a tender offer, the retailer said Wednesday.

The offer will be valued at ¥500 billion to ¥600 billion ($4.6 billion to $5.6 billion), the Nikkei newspaper reported without citing how it obtained the information. Itochu currently owns 50.1 percent of FamilyMart.

At that price, Itochu’s offer implies a premium of about 10 percent to 30 percent to FamilyMart’s current closing price. FamilyMart’s stock is down about a third this year. Japan’s trading companies have been increasing their stakes in the country’s biggest convenience store operators as a way to diversify business away from the volatile commodities sector. In 2016, Mitsubishi Corp. paid ¥144 billion to purchase a controlling stake in Lawson Inc.

If the tender offer for FamilyMart is successful, it would become a wholly owned subsidiary of Itochu, one of Japan’s largest trading companies, according to Nikkei.

Representatives for Itochu and FamilyMart could not be immediately reached for comment.

FamilyMart is Japan’s second-largest convenience store franchiser, with more than 15,000 locations.

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