Fortress Investment Group on Friday raised its bid for Japan’s Unizo Holdings by just 2.5%, still far below an offer from rival suitor Blackstone Group but keeping its hand in what could become a long fight for the hotel operator.
Unizo had at one stage turned to SoftBank Group-owned Fortress for help in fending off an offer from domestic travel firm H.I.S. Co Ltd. But the hotel operator is currently spurning all approaches, asking for control in how any potential owner would exit its investment.
Fortress, the only suitor with a formal bid currently in play, bumped up its offer to 4,100 yen per share from 4,000 yen, valuing Unizo at $1.3 billion. It extended its tender offer for a sixth time, until Nov. 29.
Blackstone, in its third proposal to Unizo, said in October it is willing to offer 5,000 yen per share, valuing Unizo at $1.6 billion. The U.S. buyout firm has said it plans to make an announcement on Monday without elaborating.
“Fortress is being tactical,” said Justin Tang, Singapore-based head of Asian Research at United First Partners, an investment and advisory group.
“They are trying to see whether Blackstone has the patience to stay on the deal.”
Unizo, whose shares last closed at 4,970 yen, has become an attractive target for investors due to the value of its assets, which UBS analysts have estimated to be worth 7,800 yen per share. That means any buyer would gain Unizo’s properties, which include offices, at a discount.
Its attractiveness has also drawn U.S. hedge fund Elliott Management, which has become Unizo’s top shareholder with 13.14%. Japan’s Ichigo Asset Management has a stake of 9% and British bank Barclays has said it holds over 5%.
Unizo said in a statement on Friday that Fortress had revised its offer without consulting Unizo, and that it will continue to ask Fortress to raise its offer to 5,000 yen per share.
For its part, Blackstone last month warned Unizo it would take all possible measures if the Japanese company does not agree to its proposed takeover.
Unizo is seeking unusual concessions from any potential owner, including the establishment of a mechanism where a group of 299 non-executive employees would control the new owner’s power to sell assets.
Elliott, which has encouraged Unizo to accept Blackstone’s proposal, has voiced concern that Unizo is just trying to drive away suitors and suggested that management is seeking to preserve their jobs. Unizo has not directly addressed Elliott’s accusations.
Source: Reuters
Can’t stop reading? Read more
Private lenders are offering cheaper debt than Wall Street banks
A secret in a $1.2 trillion world of credit is getting exposed as the Wall Street rout deepens: Private debt is now the cheaper financing option for big-ticket leveraged borrowers than the ailing public market - upending industry norms. As banks get pummeled by risk...
Eurazeo scores 3.1x return with remaining Trader Interactive stake exit at $1.9bn valuation
Eurazeo has scored a 3.1x return exiting its remaining 51% stake in branded marketplace platform Trader Interactive to Australian online automotive advertising platform carsales at a $1.9bn valuation. The sale represents pre-tax proceeds of $238m for Eurazeo. The...
TPG’s Jim Coulter: The first phase of the market downturn is close to done. Two more to go
Jim Coulter, the founding partner and executive chairman of TPG, which manages $120bn in investments, has been through seven or eight major market resets and that experience has led him to a form of pattern recognition in how downturns progress. He says there are...