March 11, 2013 / 10:21 AM / 5 years ago

Cerberus plans to raise majority stake in Japan's Seibu

TOKYO, March 11 (Reuters) - U.S. private equity firm Cerberus Capital Management LP wants to boost its stake in Japanese railway and property group Seibu Holdings Inc by as much as 4 percent as Seibu plans to relist its shares.

Cerberus, which has already paid more than 100 billion yen ($1.04 billion) to become Seibu’s biggest shareholder, will try to buy shares in Seibu from other owners via a public tender.

It aims to gain greater control over the firm by raising its stake to as much as 36.44 percent from the current 32.4 percent, Cerberus said in a statement on Monday.

In 2005 Cerberus led a bailout of Seibu, which also operates department stores and hotel chains, after Seibu Railway, a predecessor to the current company, was delisted as a result of making a false entry in its securities report.

Cerberus said it does not intend to take over Seibu, but it aims to improve corporate governance of Seibu by boosting its stake.

Cerberus has clashed with Seibu management, including Seibu President Takashi Goto, over the terms of a multi-billion dollar stock market listing originally planned for 2012, sources have told Reuters.

Cerberus also plans to nominate three high-profile people, including Hirofumi Gomi, a former commissioner of Japan’s Financial Services Agency, to Seibu’s board of directors.

Seibu has not expressed its formal opinion on the tender offer, Cerberus said. Cerberus has offered to buy Seibu shares at 1,400 yen per share, almost three times higher than its last trading price of Seibu of 485 yen.

The tender offer will start from Tuesday.

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