August 24, 2019 / 3:54 AM / 2 months ago

Japan's H.I.S. says pulls bid for control of Unizo

TOKYO (Reuters) - Japanese travel agent H.I.S. Co (9603.T) said on Saturday it is abandoning its bid for control of Unizo Holdings (3258.T), buckling in the face of a ‘white knight’ offer from SoftBank’s investment firm for the entirety of the hotel chain.

H.I.S., which already owns 4.79% in Unizo, last month launched the tender offer to buy about 40% of Unizo shares at 3,100 yen apiece.

H.I.S. said in a statement no shares were tendered to its offer that ran until Friday.

Unizo had rejected H.I.S.’s offer, which was valued at $390 million, saying it was too low and lacked synergy. Instead it backed the bid by Fortress Investment Group, a SoftBank Group (9984.T)-owned asset manager, which offered to buy all the shares in Unizo for 4,000 yen apiece.

The tug-of-war over Unizo has marked a stark departure from most acquisitions in Japan, where takeovers tend to be pre-agreed deals waiting to be rubber-stamped.

H.I.S.’s surprise hostile bid has helped Unizo shares more than double since July 9 - the day before the travel agent’s offer was announced - and provided a boost for minority shareholders.

Indeed, Fortress could be pressured by minority shareholders to raise its offer price, market participants had said.

The corporate activity has seen U.S. hedge fund Elliott Management emerge as a player. Elliott holds a 9.9% stake in Unizo, while Japan’s Ichigo Asset Management has built it stake to 6.64%, according to public filings.

Elliott is known for buying stakes in companies in the midst of acquisitions and forcing better terms for minority shareholders.

Unizo shares closed up 1.4% at 4,335 yen on Friday, while those of H.I.S. rose 3.76% to 2,623 yen.

Reporting by Junko Fujita; Editing by Shri Navaratnam

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