Japanese hotel chain Unizo Holdings has said that it has received a friendly buyout offer worth up to $1.3 billion from a SoftBank Group investment firm, a deal that will help it fend off a rare hostile takeover bid from travel agency HIS Co.
US-based Fortress Investment Group is launching a tender offer for all of Unizo's shares at 4,000 yen apiece ($37.68), the companies said in separate statements, trumping the 3,100 yen that HIS has offered.
Unizo has publicly opposed the HIS bid, saying it lacked synergy and undervalued the hotel chain.
"White Knight"
The Nikkei daily earlier reported that the hotel operator had sought help from Fortress as a "white knight".
This represents an unusual counter-offensive in Japan, where M&A offers tend to be pre-agreed deals waiting to be rubber-stamped and hostile bids like that of HIS remain rare.
"Our board of directors has decided to support the Fortress Group bid...and encourages shareholders to tender their shares," Unizo said in a statement.
Fortress said it was seeking a minimum 66.67% stake and would drop the bid if it did not secure that.
HIS, which owns 4.79% in Unizo, launched a tender offer last month to raise its stake to as much as 45%.
A spokesman for HIS said that it was examining Fortress's bid and would make an announcement if it takes any new measures.
Elliott Stake
US hedge fund Elliott has been gradually raising its stake in Unizo and now holds 9.9%, regulatory filings show.
The US activist investor is known for buying stakes in companies in the midst of an acquisition and forcing better terms for minority shareholders.
Unizo shareholders should welcome Elliott's intervention because it has already contributed to improving the hotel chain's share price since the fund's ownership surfaced on August 6, said Stephen Givens, a Tokyo-based corporate lawyer.
A Hong Kong-based representative for Elliot declined to comment on its Unizo stake.
Fortress Strategy
Fortress built its footprint in Japan by snapping up troubled hotels in the wake of the 2008 financial crisis when most investors shunned the sector.
Buying out Unizo, which operates limited-service hotels across Japan, would complement Fortress's strategy. The investment firm controls Mystays Hotel Management Company, which operates hotels similar to the type Unizo runs.
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