Japanese home furnishings retailer Nitori Holdings Co. said Thursday it will launch a rival takeover bid in mid-November to make do-it-yourself and hardware store operator Shimachu Co. a wholly owned subsidiary, triggering a fierce acquisition battle with a major DIY store operator.
Nitori set its bid price at ¥5,500 ($53) per share, surpassing the ¥4,200 per share that its rival DCM Holdings Co., a Tokyo-based operator of DIY store chains, is paying in a tender offer through Nov. 16 worth up to ¥163.6 billion.
Nitori plans to spend a total of ¥214.3 billion on the takeover bid. On the Tokyo Stock Exchange, Shimachu shares closed Thursday’s session up 3.5 percent at ¥5,060.
Given Nitori’s higher bid price and Shimachu’s recent share price rises, DCM could be forced to raise its offer before its tender offer period ends on Nov. 16.
Nitori Chairman Akio Nitori said in a press conference he will start holding talks with Shimachu’s management to gain their support for the planned tender offer.
Domestic retail firms have been struggling to expand amid Japan’s rapidly aging population, intensifying cross-industry competition among home furnishings retailers, hardware stores and drugstores.
But Nitori, which is based in Hokkaido and is known for affordable products, has been growing steadily, posting a double-digit rise in sales and profits in the first half of its current business year through next February.
The coronavirus pandemic has helped boost its sales as customers spend more time at home.
Operating about 560 stores across Japan and around 70 overseas as of August, Nitori seeks to expand its operations in Tokyo and surrounding prefectures by acquiring Shimachu to achieve its target of 3,000 outlets in total and ¥3 trillion in revenue. Shimachu, which is based in Saitama, north of Tokyo, has around 60 stores.
For DCM, a successful acquisition of Shimachu will make it the biggest DIY store operator in the country with annual sales of around ¥500 billion, surpassing the current leader Cainz Co.
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