| TOKYO, June 28
TOKYO, June 28 U.S. private equity firm TPG is
interested in investing in Japan's Seibu Holdings by either
buying a stake from top shareholder Cerberus Capital Management
or by acquiring new shares, people with knowledge of
the matter said.
TPG sees potential value in Seibu's businesses, which
include its Prince Hotel chain in Japan, and held initial talks
with Seibu management earlier this year, according to the
sources, who asked not to be named.
Those talks took place earlier this year before Cerberus
launched an unsolicited bid to boost its stake in Seibu in
March, the sources said. TPG would only make the offer if Seibu
management agreed to its involvement, they added.
TPG declined to comment.
The emergence of another financial investor in the embattled
Japanese property and railways firm could complicate efforts by
Cerberus to shake up the management of Seibu, where it remains
the largest single investor with a stake of 35.48 percent.
The standoff between Cerberus and Seibu has been seen by
some investors as a test of Japan's receptivity to foreign
capital as popular Prime Minister Shinzo Abe promises to
deregulate the economy to stoke growth.
A spokesman for Cerberus said the private equity firm has no
intention of selling its stake to a third party.
Seibu said in a statement that it was not planning to issue
new shares and was not in a position to comment on the potential
of a sale by Cerberus of its shares.
It was not immediately clear whether the offer could proceed
without the backing of Cerberus, which has a large enough stake
to veto shareholder resolutions.
The issuance of new shares to TPG would also dilute the
holdings of other investors, including state-backed lender
Development Bank of Japan and Norinchukin Bank, the central bank
for Japan's agriculture, forestry and fisheries cooperatives.
Cerberus in March launched an unsolicited bid to boost its
stake in Seibu from 32.4 percent to 44.7 percent to exert
additional leverage over Seibu management. The bid only allowed
Cerberus to increase its stake to 35.48 percent.
That is a big enough margin to allow Cerberus to veto
decisions at future shareholder meetings.
Cerberus first invested in Seibu in 2006 and helped the
company rebuild after it was delisted from the Tokyo Stock
exchange for falsifying financial reports.
At Seibu's annual shareholder meeting on Tuesday, investors
voted down a dissident slate of directors proposed by Cerberus,
including former U.S. Vice President Dan Quayle.
A number of individual investors in Seibu rallied to
management's defence at the meeting, saying the U.S. fund could
shut down Seibu's unprofitable local rail lines outside Tokyo or
sell the company's Seibu Lions baseball team to increase its
returns despite local opposition.
TPG, founded in 1992, is one of the largest private equity
firms with $56.7 billion of capital under management.
Its global investments range from financial institutions,
healthcare and medical companies to airlines and chipmakers.
TPG's other holdings in Japan include top toy maker Takara Tomy,
where it holds a 4.7 percent stake.
TPG in the past has offered to inject up to roughly $1
billion in both Olympus Corp, a medical equipment maker
which sought outside capital to survive after an accounting
scandal, and Japan Airlines Co. Neither offer resulted
in a deal.