Japan activist Murakami advances in bid for lucrative crematorium business

Kosaido Holdings

26/04/2019 11:39

By Junko Fujita
    TOKYO, April 26 (Reuters) - Veteran Japanese activist
shareholder Yoshiaki Murakami scored another success in his bid
for a little-known printing company Kosaido Co  7868.T  after
management said it would not oppose his offer for at least half
of the firm.
    Tokyo-based Kosaido emerged earlier this year as the
unlikely battleground between Murakami, 59, and U.S. private
equity giant Bain & Co, after both made competing bids for it -
and its stake in a lucrative crematorium business.
    The Bain-backed management buyout failed this month after it
didn't get enough support from shareholders at a revised 700 yen
a share. Bain initially offered 610 yen a share but later
sweetened that. Murakami's Minami Aoyama Fudosan has offered 750
yen a share, an offer that runs until May 10 and values Kosaido
at 18.7 billion yen ($167 million). 
    "We have not been able to determine whether our corporate
value would be boosted by the fund linked to Murakami," Kosaido
said in a statement released after the market closed on
Thursday.
    "But we cannot recommend that shareholders reject the bid
because the price is higher than that of Bain Capital."
    Kosaido has been undervalued by the market for too long,
Minami Aoyama Fudosan said in a statement last month. The
70-year-old company prints newspapers and advertisements. But
the key to the deal may be its 61 percent stake in a funeral
hall and crematorium business, Tokyo Hakuzen. 
    Despite Tokyo's massive population and the rapid ageing of
Japanese society, funeral companies have a hard time building
new crematoriums given opposition from local communities. That
means existing facilities tend to be lucrative.
    Minami Aoyama Fudosan has also said the value of Tokyo
Hakuzen is not fully reflected in Kosaido's share price.
    Minami Aoyama Fudosan and another Murakami fund, Reno,
together own a 13.47 percent stake in Kosaido, according to
Thursday's release.
    Shares of Kosaido closed at 763 yen a share on Friday, above
Murakami's offer price. The shares have doubled in value this
year.  
($1 = 111.6700 yen)

 (Reporting by Junko Fujita; Editing by David Dolan and
Muralikumar Anantharaman)
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