Japanese travel agency H.I.S. Co has given up its bid for a controlling stake in Unizo Holdings, Nikkei Business reported on Friday, after a SoftBank-owned firm made a $1.3 billion ‘white knight’ offer for the hotel operator.
Without citing sources, Nikkei Business said H.I.S. was abandoning the bid after deciding not to raise its offer price of 3,100 yen per share to buy another 40% of Unizo.
A representative for H.I.S., which owns 4.79% of Unizo and had planned to run its tender offer through Friday, was not immediately available for comment.
A Unizo spokeswoman declined to comment on the Nikkei Business report.
Unizo had rejected last month’s approach from H.I.S., which was valued at $390 mln, saying it was too low and lacked synergy.
It instead backed the friendly approach from SoftBank-owned Fortress Investment Group for the whole company a week ago at 4,000 yen per share.
The tug-of-war over Unizo has marked a stark departure from most acquisitions in Japan, where takeovers tend to be pre-agreed deals waiting to be rubber-stamped. Unwelcome bids, like that of H.I.S., are particularly rare.
H.I.S.’s exit would make Fortress the only bidder for Unizo but market participants said Fortress could be pressured by Unizo’s minority shareholders to raise its offer price.
Unizo shares rose 0.12% to 4,280 yen in morning trade on Friday, above the Fortress offer price. Shares of H.I.S. rose 4.67% to 2,646 yen.
U.S. hedge fund Elliott Management already holds a 9.9% stake in Unizo, while Japan’s Ichigo Asset Management has built its stake to 6.64%, according to public filings.
UBS has calculated Unizo’s net asset value – a measure of an entity’s net value – at more than 7,800 yen a share after taxes.
“The fate of Fortress’s bid all depends on how Unizo shares will perform going forward,” said a person familiar with the Fortress bid.
Elliott is known for buying stakes in companies in the midst of acquisitions and forcing better terms for minority shareholders.
Ichigo Asset said in the filing it acquired the stake to protect minority shareholders and it might make significant proposals to Unizo.