Private equity firm Cerberus Capital is reportedly on the brink of increasing its stake in Japanese hotel and rail operator Seibu to more than one third from 32.4 per cent to secure the right to veto major board decisions.
The acquisition will be made through a takeover bid, which is set to expire today according the Japan Times.
Raising its stake to more than one third would give Cerberus the right to veto major board decisions, but it falls short of the firm’s target if 44.7 per cent, which would enable it to take control of Seibu’s management.
Cerberus has previous said it wanted to increase its stake in the business to 44.7 per cent and appoint a further seven members to the board, which would give it eight out of 15 seats.
However, Seibu has adamantly opposed Cerberus’ efforts to tighten its grip on the company.
Last month it was reported that Seibu’s president Takashi Goto said he would not make any concessions to Cerberus.
He added the company was definitely against the proposals made by Cerberus as they would “hurt Seibu Group’s mid- and long-term strategy”.
Seibu is supported by its major shareholders including its lenders and NW Corp, said the sources.
Cerberus and Nikko Principal Investments Japan reportedly invested about $1.38bn in the business in 2005.
Seibu expects to report a net income of $132m for the past financial year, up from $89m a year earlier.
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