Murakami-backed fund plans Japanese bid battle with Carlyle (updated)

Kosaido Holdings

14/01/2021 10:02

(Adds details, background)
    By Junko Fujita
    TOKYO, Jan 14 (Reuters) - A Japanese fund backed by veteran
investor Yoshiaki Murakami plans to make an 18 billion yen ($173
million) bid for energy and environment firm Japan Asia Group
(JAG)  3751.T , topping a management buyout offer backed by
Carlyle Group  CG.O . 
    City Index Eleventh said on Thursday it would offer 840 yen
per share for JAG, a 40% premium to Carlyle's offer of 600 yen. 
    Global buyout fund Carlyle teamed up with JAG's chairman and
CEO Tetsuo Yamashita in November to launch the management buyout
that values JAG at 16.4 billion yen and is worth 37 billion yen
in total, including two other JAG businesses. 
    JAG shares have more than doubled since Nov. 4, the day
before that announcement, reaching 785 yen on Thursday.  
    JAG was not immediately available to comment on City Index
Eleventh's proposal. Carlyle declined to comment. 
    Earlier on Thursday, JAG said Carlyle had extended its bid
for a second time to Jan. 28 as its shares were trading above
Carlyle's offer. 
    JAG is the latest company to become a battleground between
Murakami's fund and a global private equity firm, following Bain
Capital's failed bid for a printing firm in 2019.  
    City Index Eleventh, which with other parties already has a
19.05% stake in JAG, had described Carlyle's bid as "unfairly"
cheap and asked it to raise the offer price, but was rebuffed. 
    "We have terminated talks with Carlyle and decided to launch
our own bid at 840 yen, which represents per share capital for
JAG," said City Index Eleventh.
    The activist fund did not say when it would launch the bid. 
    U.S. buyout fund Bain Capital failed in 2019 in its bid to
buy a small printing firm Kosaido Co  7868.T  after a fund
backed by Murakami said Bain's offer undervalued the company. 
    ($1 = 104.0800 yen)

 (Reporting by Junko Fujita. Editing by John Stonestreet and
Mark Potter)
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