Lone Star is Set to Win the Bid Battle for Japanese Hotel Group Unizo

Main Photo: The Unizo Inn Hiroshima, opened March 2019

Date: March 2020

Location: Japan

Name: Unizo Hotels – 26 hotels, with 4 in the pipeline under three brands

No. of Keys: 6,074, with 1,389 in the pipeline

Seller: Japanese hotel chain Unizo Holdings Co Ltd said on Wednesday top shareholders Elliott Management and Ichigo Asset Management have agreed to tender their shares to Lone Star after the U.S. fund raised its bid to 6,000 yen per share.

Buyer: The agreement from Elliott and Ichigo, which together control 22.46% of Unizo, may help bring an end to a bidding war also involving Blackstone Group Inc and SoftBank Group Corp’s Fortress Investment Group.

Unizo was a little known company until July when travel agent H.I.S. Co Ltd made a rare-for-Japan hostile bid to buy control of the company. Unizo initially backed Fortress’s white-knight bid but quickly withdrew its support.

Blackstone joined the bidding war in October, proposing to buy the company only if Unizo backs its bid. Its latest offer is 6,000 yen per share.

Lone Star emerged as a new white knight in December. The U.S. fund is trying to buy Unizo under a scheme allowing a group of Unizo employees to own 73% of Unizo’s common shares, while Lone Star would hold the remainder.

Lone Star raised its bidding price from 5,700 yen to 6,000 yen even as Unizo shares tumbled 10% in the preceding month as market participants fretted about the impact of the coronavirus outbreak on the tourism industry.

Unizo shares closed at 5,250 yen on Wednesday in Tokyo.

Unizo said it would continue to support Lone Star’s bid, which expires on April 2. Elliott and Ichigo Asset could withdraw their agreement if a third party offers higher price than Lone Star’s offer, Unizo said.

THPT Comment: Good to see deals of this magnitude still going through. 73% of the common shares to be held by Unizo employee group…great.

First SeenReuters

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