January 14, 2022

Japanese hotelier turns to SoftBank fund as White Knight

TOKYO – Japanese real estate company Unizo Holdings is in talks with SoftBank Group’s Fortress Investment Group, seeking his help as a white knight in blocking a hostile takeover bid by travel agency HIS, according to people familiar with the case.

Unizo is best known as a business hotel operator and has 25 business hotels across Japan. HIS also operates 33 hotels in Japan and abroad, and aims to expand.

Fortress is expected to begin the buyback process early next week, with a purchase price higher than the 3,100 yen per share offered by HIS Fortress aims to acquire all Unizo shares and delist the company. Tokyo-listed Unizo shares stood at 3,600 yen at the close of trading on Thursday, giving it a market cap of 123 billion yen ($ 1.16 billion).

Following the Nikkei report, Unizo announced Friday morning that it was “in talks with a candidate” regarding the offer. The company also said its board of directors and a special committee will discuss the matter on the same day. Unizo’s share price jumped 12.9% to close the morning session at 4,065 yen.

If the buyout is finalized, Fortress hopes to increase the profitability of Unizo’s real estate holdings or sell assets. Unizo has decided that a partnership with Fortress would add more value to the company than the proposed takeover by HIS, according to people familiar with the matter.

In July, HIS launched a takeover bid to buy up to 40% of Unizo’s shares by August 23. Unizo’s board of directors announced its opposition to the offer on August 6.

SoftBank bought New York-based investment manager Fortress in 2017. In Japan, Fortress operates the Mystays hotel chain, as well as real estate investment funds.

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