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 equity firms revise China strategy as regulatory crackdown widens
Private equity firms are rethinking their strategies in China as a widening regulatory crackdown on some of the country’s hottest sectors forces investors to scout for bets in other industries that they hope will be less vulnerable to sudden policy changes. Private...
TPG Real Estate Partners and Gatehouse Bank launch £500m UK single family JV
TPG Real Estate Partners, the dedicated real estate equity investment platform of global alternative asset firm TPG, and Gatehouse Bank, a UK retail bank and real estate investment firm specialising in build-to-rent and the private rented sector, have launched a new...
UPDATE: Morrisons suitor CD&R gets more time to trump $9.3bn offer
Morrisons suitor, U.S. private equity group Clayton, Dubilier & Rice, has won more time to consider a counter bid to Fortress' agreed $9.3bn offer for the British supermarket group. Britain's Takeover Panel, which regulates corporate takeovers, said on Monday...