Cerberus boosts Seibu tender offer, intensifies row with management

Cerberus announced its public tender offer last month, but only sought to increase its holding by 4%, which would give it power to veto board proposals at shareholder meetings, plus three seats on the board. The deadline for the tender offer has been pushed back to May 17, giving the private equity firm more time to crank up pressure on the Seibu board.

Cerberus paid $802 million for a 29.9% stake in the company in 2006, participating in a $1.2 billion bailout alongside Nikko Principal Investments. Seibu was delisted from the Tokyo Stock Exchange in 2004 after misstating stakes held by shareholders in contravention of exchange rules.

An IPO was planned for late 2012 but it was held up because the private equity firm wanted a higher valuation than that favored by Seibu's management. Cerberus also called on management to consider options such as selling its baseball team, the Saitama Seibu Lions, and reducing its railway holdings.

Japan is a challenging market for foreign buyout firms, which are regarded with suspicion by some company executives and government officials.

Last month, the Japan Private Equity Association - which counts a host of global and local PE firms among its members - urged the government to rein in state-backed funds such as Innovation Network Corporation of Japan (INCJ). The association argued that investments by such vehicles are squeezing out opportunities for private capital and delaying the restructuring of ailing companies.

The remarks came just months after INCJ bailed out chipmaker Renesas Electronic Corp to the tune of JPY150 billion ($1.8 billion), frustrating plans by KKR to invest JPY100 billion in the company.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• PIPEs
• Buyout
• Japan
• Cerberus Capital Management
• PIPE