Asset managers say tender price for Japan's JCOM too low

TOKYO, March 6 Wed Mar 6, 2013 7:28am EST

TOKYO, March 6 (Reuters) - Four global asset managers with stakes in Japanese cable service provider Jupiter Telecommunications (JCOM) said the price of an ongoing buy tender was set too low and needed to be raised.

Japan's KDDI Corp and Sumitomo Corp, which together own about 75 percent, issued a tender in October to buy the remaining outstanding shares of JCOM in a move to merge the companies' cable businesses.

The tender offer price was raised to 123,000 yen per share last week from the original offer price of 110,000 yen in October. The tender is set to close on April 10.

Four asset management companies - Beach Point Capital Management, Neuberger Berman, Owl Creek Asset Management and P.Schoenfeld Asset Management - are still not satisfied, expressing their disappointment in a letter sent to JCOM's board of directors on Wednesday.

The four companies, which collectively hold 5.5 percent of JCOM, said the price remained far below the 139,500 yen per share that Sumitomo and KDDI paid in 2010 to obtain control of the cable service provider.

Based on its EBITDA (earnings before interest, tax, depreciation and amortisation) at the end of December, the value per share of JCOM should be at least 160,700 yen, they said.

In addition, the revised tender offer price did not reflect a broader rise in Japan's Topix stock index, which has surged more than 30 percent since October, they said.

"While we are pleased that the board (of JCOM) and its advisers decided to renegotiate the tender offer price as we requested, we are disappointed with the result," the four asset managers said in the letter.

"The revised tender offer price remains grossly inadequate, and the increase in the already unfair price represents less than half of the 30 percent increase in TOPIX since the tender offer was originally announced more than four months ago."

JCOM was not immediately available for comment.

JCOM shares closed 0.2 percent higher at 123,400 yen. JCOM shares were around 82,700 before the buy tender deal was announced in October. (Reporting by Chikafumi Hodo; Editing by Helen Massy-Beresford)

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