Hotelier bidding war may be Japanese wakeup call

HIS Co

03/09/2019 03:50

(The authors are Reuters Breakingviews columnists.  The
opinions expressed are their own.)
    By Alec Macfarlane and Jeffrey Goldfarb
    HONG KONG, Sept 3 (Reuters Breakingviews) - Travel agent
H.I.S. ended its unsolicited tilt at Unizo, ceding to
SoftBank-owned investment firm Fortress. The unusual hostilities
for Japan helped the target’s stock price more than double. This
deal, enabled by wider reforms, suggests more value could be
hidden in plain sight.
    Full view will be published shortly.
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    CONTEXT NEWS
    - Japanese travel agent H.I.S. said on Aug. 24 it was
abandoning its unsolicited bid for control of Tokyo-listed hotel
chain Unizo, paving the way for a takeover of the company by
Fortress Investment Group. Unizo’s board on Aug. 16 backed the
bid from Fortress and urged shareholders to apply to its tender
offer.
    - H.I.S., which already owns 4.8% of Unizo, initiated a
tender offer in July to buy roughly 40% of Unizo’s shares for
3,100 yen each, or $400 million. H.I.S. said in a statement that
no shares were tendered to its offer. 
    - Unizo had rejected the H.I.S. offer, saying it was too low
and lacked synergies. Instead, it backed the white knight bid by
Fortress, a unit of Japan’s SoftBank Group, which offered to buy
all the company’s shares for 4,000 yen each, or $1.3 billion,
more than double the undisturbed price on July 9, the day before
H.I.S. unveiled its offer. They were trading at 4,270 yen on
Sept. 3.
    - U.S. hedge fund Elliott Management also emerged as an
investor during the process, and held a 9.9% stake in Unizo as
of Aug. 14, according to a regulatory filing. Japan’s Ichigo
Asset Management said on Aug. 20 it had acquired a 5.6% stake to
protect minority shareholders and that it might make significant
proposals to Unizo. 
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Unizo statement    https://www.unizo-hd.co.jp/en/news/file/EN_20190824.pdf
Japan's H.I.S. says pulls bid for control of Unizo   
 urn:newsml:reuters.com:*:nL4N25K02O
BREAKINGVIEWS - Private equity’s broken record plays on in Japan
    urn:newsml:reuters.com:*:nL4N23Y0KF
BREAKINGVIEWS - Bowl is half full for Japanese toilet maker
Lixil     urn:newsml:reuters.com:*:nL4N23X07P
BREAKINGVIEWS - Hedge funds see honey in Japan’s value traps   
 urn:newsml:reuters.com:*:nL4N2370EI
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Jeffrey Goldfarb, Clara Ferreira Marques and Sharon
Lam)
 ((alec.macfarlane@thomsonreuters.com; Reuters Messaging:
alec.macfarlane.thomsonreuters.com@reuters.net))