UPDATE 2-SunTelephone's management buyout gets approval

Wed Feb 14, 2007 11:13am GMT

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(Adds tender value in paragraph 2.)

By Alison Tudor, Asia Private Equity Correspondent

TOKYO Feb 14 (Reuters) - Shareholders in Japanese machinery leasing firm SunTelephone Co. Ltd. 8083.T have tendered 95.3 percent of outstanding shares, excluding treasury stock, in a management buyout, the company's largest shareholder said on Wednesday.

In December, private equity firms Japan Industrial Partners and Bain Capital Partners LLC launched a $550 million tender offer for SunTelephone in partnership with the company's management.

U.S. fund Dalton Investments, the largest shareholder, tendered a 40 percent stake with voting rights.

"The successful tender offer is a real breakthrough and demonstrates that shareholders are willing to consider different strategies for maximizing the value of their investment," said James Rosenwald, Dalton founder and managing partner, in a statement.

Los Angeles-headquartered Dalton told Reuters on Jan. 19 that, along with the buyout, it would exercise an option to buy 10 percent of SunTelephone, which it would keep once the company goes private.

"We are likely to see many more transactions like this, because there are far too many companies in Japan that, like SunTelephone, are basically sound but are trading at a significant discount to fair value," Rosenwald said in the statement.

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