U.S. buyout fund Lone Star has struck a $1.9-billion deal for hotel chain Unizo Holdings Co Ltd (3258.T), the Japanese firm said on Friday, ending a nine-month bidding war among global investors such as Blackstone Group (BX.N) and Fortress Investment Group.
The takeover battle had shaped as a test case for government efforts to attract foreign investors through improved corporate governance, since it sparked questions over the tactics employed by Unizo’s management.
In a statement, the hotel chain said Dallas-based Lone Star, together with a group of Unizo employees, secured 86.6% of outstanding shares in an open bid that started in December.
The bid valuing the company at 205 billion yen ($1.9 billion) concluded after Lone Star won agreement from Unizo’s top two shareholders, Elliott Management and Ichigo Asset Management, to tender their shares after the fund sweetened its bidding price this month to 6,000 yen per share.
Unizo had been little-known until July, when travel agent H.I.S. Co Ltd (9603.T) made a hostile bid, rare for Japan, to buy control.
Unizo initially supported a white knight bid by Fortress Investment Group, which is backed by SoftBank Group (9984.T), but quickly withdrew the support.
Blackstone joined the bidding war in October, proposing to buy the company only if Unizo backed its bid. Its latest offer was 6,000 yen per share.
Unizo had also been rejecting other bids, citing concerns on securing employment. It had also made a rare request to bidders that a group of employees have the right to control the new owner’s power to sell assets.
Such an approach raised governance questions regarding Unizo’s management, making it a test case for government efforts to attract foreign investors through improved corporate governance.
Lone Star emerged as a new white knight in December, creating a scheme allowing a group of Unizo employees to own 73% of common shares, while Lone Star would hold the rest.
Lone Star would provide 178 billion yen in financing for the buyout, which would give it the right to own the company..
Unizo shares, which closed at 5,940 yen on Friday, have tripled since H.I.S. launched its bid.
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