Japan’s Unizo Holdings (3258.T) said it is in talks with a potential partner after the Nikkei reported a SoftBank Group (9984.T) firm will offer to buy out the hotels operator to help it fend off a hostile takeover bid.
U.S.-based Fortress Investment Group will open a tender offer as soon as next week for all of Unizo’s shares at a higher price than the 3,100 yen per share that travel agency H.I.S. Co (9603.T) has offered.
Unizo, which opposes H.I.S.’s bid, has sought help from Fortress as a ‘white knight’, the Japanese daily said, without citing sources.
A bid by Fortress would represent an unusual counter-offensive in Japan, where M&A offers tend to be pre-agreed deals waiting to be rubber-stamped and hostile takeover bids like that of H.I.S. remain rare.
Unizo, in a statement, also said it would hold a board meeting on Friday, without commenting further on the report.
Fortress declined to comment. An H.I.S. representative was not available for comment.
H.I.S., which already owns 4.79% in Unizo, last month launched a tender offer to raise its stake in Unizo to as much as 45%.
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.
Although Fortress is owned by SoftBank, which runs the multibillion dollar Vision Fund, the U.S. fund maintains an independent investment strategy, sources have told Reuters.
Unizo has a stock market value of about 123.5 billion yen ($1.2 billion), according to Refinitiv data. It also had about 554 billion yen ($5.2 billion) of debt as of March, which would give it an enterprise value of around $6.4 billion.
U.S. activist investor Elliott Management has been gradually raising its stake in Unizo and now holds 9.9% of the hotel operator, regulatory filings show.
Elliott is known for buying stakes in companies in the midst of an acquisition and forcing better terms for minority shareholders.
Elliott’s ownership in Unizo first became public knowledge on Aug. 6 and the fund says it may seek “constructive dialogue” and make “significant proposals”, the filings show.
Unizo shares surged 14% to 4,110 yen on Friday, or 32.5% above H.I.S.’s offer.