Japan’s Itochu boosts FamilyMart stake despite criticism over offer

FILE PHOTO: The signboard of a joint FamilyMart/Don Quijote convenience store is pictured in Tachikawa, Tokyo, Japan June 1, 2018. REUTERS/Sam Nussey/File Photo

Japanese trading house Itochu Corp boosted its stake in convenience store chain FamilyMart Co to about two-thirds after a $5.5 billion tender offer that was criticised by some activist investors as being too low.

Itochu, which already owned 50.1% of the FamilyMart chain, said on Tuesday it secured enough shares to take its stake to over 65%, making the tender offer successful.

Itochu had launched the tender offer to gain greater control of FamilyMart to speed up decision-making at the chain, which competes with 7-Eleven, part of retail giant Seven & i Holdings, and Lawson Inc, owned by rival trading house Mitsubishi Corp.

It had offered 2,300 yen per share, compared with their price of 1,766 yen before the announcement, with a plan to delist FamilyMart.

Activist fund Oasis Management had said that FamilyMart, by not demanding a higher price, had neglected minority shareholders and should pay a special dividend to compensate.

FamilyMart had supported the offer with the caveat that shareholders should decide for themselves whether the price was adequate.

The stores, ubiquitous in Japan and offering everything from “bento” pre-made meals to socks and underwear, have been hit by the pandemic as more people have stayed at home.

But the stores had already been facing slower growth in recent years. In addition to a shrinking population and sluggish consumer spending, the industry is grappling with a shortage of workers and competition from drugstores, which started selling food following deregulation.

Itochu has said it plans to use its investment and expertise in other food operations to bolster FamilyMart’s business. Itochu acquired Dole Food Company’s Asian fresh produce and worldwide packaged food business in 2013.

The latest move also allows the trading house to shift further away from the struggling energy and mining businesses to focus on the consumer sector.

FamilyMart shares closed on Tuesday at 2,295 yen, up 1.7%. Itochu shares ended 0.7% higher.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.