By Junko Fujita
TOKYO Oct 26 U.S. private equity firm Lone Star
will sell its entire stake in PGM Holdings , one of
Japan's largest golf course operators, for 39.5 billion yen
($521 million) as it seeks to exit one of its largest
investments in distressed assets in Japan.
Lone Star has agreed to sell its 64 percent stake to
Japanese "pachinko" pinball machine maker Heiwa Corp ,
the manufacturer said. Heiwa will offer 52,000 yen per share for
PGM Holdings, a 30 percent premium on Wednesday's closing price
of 39,850 yen.
The offer price is far below the company's historical high
of 301,000 yen marked in January 2006, a few months after PGM
Heiwa will launch a tender offer to also buy shares from
other shareholders but it plans to keep PGM, which Lone Star
took public in 2005, as a listed company, Heiwa chief executive
Yasuhiko Ishibashi said at a media briefing.
Separately, PGM said Heiwa would launch a tender offer to
take control of it. An official at Lone Star's Tokyo office said
it was not making any comment on the sale.
Lone Star's decision follows a similar move by Goldman Sachs
, which earlier this year sold its stake in Accordia Golf
, another golf course operator which competes against
Lone Star and Goldman snapped up a string of failed golf
courses in Japan following the bursting of Japan's asset bubble
in the early 1990s. They turned the businesses around and sold
shares in the companies in initial public offerings to reap
Lone Star's exit from the golf business follows its sale of
two office buildings and a hotel in central Tokyo to Mitsubishi
Estate earlier this year. The U.S. fund has also put on
sale another Tokyo property, an office and banquet hall complex.