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Japan’s Advantage Partners in talks to sell Gyukaku barbeque chain

10 Sep 2012

Tokyo buyout house Advantage Partners is reported to be in talks to sell Rex Holdings Co, operator of the Gyukaku barbeque chain in Japan, to trade buyer Colowide Co.

Colowide, a major restaurant chain operator that owns Japanese pub chains Amataro and Hokkaido, is expected to buy two-thirds of the company’s stock from Advantage as early as October, The Yomiuri Shimbun reported over the weekend.

Tomoyoshi Nishiyama, Rex’s president, owns about 25 per cent of the business.

The sale is expected to fetch about JPY13.7bn ($175m).

Rex owns around 1,200 restaurants including the Gyukaku brand and the Doma-Doma izakaya pub chain, the report said.

The company formerly owned the am/pm convenience store chain and the Seijo Ishii supermarket chain, but sold both to bolster its balance sheet and focus on its restaurant business.

Advantage bought Rex through an MBO in 2006 for JPY45.72bn (then $395m).

The report added that the overall performance of Rex’s restaurant business has declined in recent times, primarily due to public caution towards barbeque restaurants following a case of food poisoning at the Yakiniku-zakaya Ebisu barbecue restaurant chain last year.

Reports earlier this year confirmed that Advantage Partners has no immediate plans to raise a new fund and will not extend the investment period of its current JPY220bn ($2.9bn) fund, which currently ranks as Japan’s largest buyout vehicle.

The firm incurred multi-billion dollar losses last year from its failed investment in Tokyo Star Bank after admitting that four special purpose firms it set up to buy the company had missed loan payments.

The firm’s current fund is due to mature in 2017 and has yet to invest around JPY40bn, which could be invested in assets that the vehicle already holds – even after the investment period expires this summer.

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