Japan dining chain Ootoya ties up with online grocer amid hostile bid (updated)
14/08/2020 06:48
(Updates with latest share price, background on companies)
TOKYO, Aug 14 (Reuters) - Japanese restaurant chain Ootoya
Holdings 2705.T announced a partnership with online grocery
retailer Oisix Ra Daichi Inc 3182.T on Friday, aiming to fend
off a hostile bid by its rival and largest shareholder, Colowide
Co 7616.T .
Ootoya, which operates a casual dining chain popular for its
home-style cooking, has been under pressure to show investors
that it has a better plan than the one by Colowide, which
offered a 46% premium to the shares' value before the bid.
Under the partnership, Ootoya and Oisix plan to jointly sell
food, including meal kits, an increasingly popular item among
shoppers who want homemade meals but have little time to prepare
them.
The announced deal did not involve an exchange of capital,
but the Nikkei financial daily reported that the two may
eventually discuss a capital alliance as an alternative to
Colowide's plan.
Ootoya shares were unchanged late on Friday at 2,862 yen.
They are still trading below Colowide's bid of 3,081 yen per
share. The offer by Colowide, which aims to increase its stake
in Ootoya to 51.32% from 19.16%, runs until Aug. 25.
urn:newsml:reuters.com:*:nL3N2ER24M
Although hostile bids such as Colowide's are still rare,
financial analysts say more Japanese companies are turning to
such moves as they seek ways of securing growth amid a sluggish
economy.
Restaurant groups such as Ootoya and Colowide, which
operates a wide range of dining chains such as pubs and sushi
restaurants, are struggling with weak sales, as the pandemic has
discouraged people from dining out.
Online food delivery services such as Oisix, on the other
hand, have become popular this year as the pandemic discouraged
people from shopping in crowded supermarkets.
Oisix is one of Japan's biggest online food retailers,
specialising in organic vegetables. Its main competitors are
consumer cooperatives and the growing e-commerce sites of big
supermarkets such as Aeon 8267.T and Seven & i Holdings
3382.T .
(Reporting by Junko Fujita and Ritsuko Ando; Editing by Gerry
Doyle)
((Ritsuko.Ando@reuters.com))