Cerberus-backed Seibu eyes April Tokyo listing
Japanese railway and hotel operator Seibu Holdings is targeting a JPY186 billion ($1.8 billion) IPO in Tokyo next month, potentially ending a three-year battle between the management and shareholder Cerberus Capital Management.
The IPO - which is set to be Japan's biggest so far this year - will see Cerberus sell a 15.5% stake in the company. Its holding will drop from 35.48% to just under 20% but it will remain Seibu's biggest shareholder, a regulatory filing shows.
Citigroup Capital Partners, UBS Securities, Norinchukin Bank and the Development Bank of Japan will also sell shares via the offering, which will take place on April 23.
According to Reuters, a tentative price of JPY2,300 a share has been set, valuing the entire company at JPY787 billion. This means Cerebus could reap more than JPY100 billion from the sale.
Relations between Cerberus and Seibu management turned sour in 2011 following disagreements over the timing and pricing of the IPO. The float was originally 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.
Seibu delisted from the Tokyo Stock Exchange in 2004 amid a scandal over misstating stakes held by shareholders in contravention of exchange rules. 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.
The New York-headquartered buyout firm then raised its stake to 35.48% in June last year following an unsolicited public tender, although it fell short of its 44.7% target. The tender offer had been sparked by moves from Seibu to severe formal ties with the firm.
Cerberus then tried to assert more control over the Seibu management by having eight new directors appointed to the board but efforts were voted down by shareholders at the company's annual meeting
In its latest earnings report, Seibu reported a 40% gain in net profit from a year ago, largely due to the success of its hotel and construction businesses. The company owns the second-largest private railroad in Japan and the country's largest hotel chain, Prince Hotels & Resorts. It also one of the Japan's largest landowners.
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