(Adds background on Ootoya, updates share price)
TOKYO, Aug 25 (Reuters) - Japanese fast-food restaurant group Colowide Co has extended its hostile bid for rival Ootoya Holdings after failing to secure enough shares by Tuesday’s deadline, despite offering a hefty premium.
The bid has attracted widespread publicity not only because hostile offers are uncommon in consensus-driven Japan, but also due to the popularity of Ootoya, a casual dining chain known for its home-style dishes.
Colowide, which runs several popular pub chains and already holds a 19% stake in Ootoya, said it was giving shareholders until Sept. 8 to tender their shares.
It has offered to buy the shares at 3,081 yen per share, a 46% premium to their earlier value.
Colowide also said it would make the purchases if it can secure at least 40% of Ootoya, lowering a previous target of at least 45%.
The extended bid shows how Ootoya shareholders, while worried about the COVID-19 pandemic’s impact on the restaurant business, are reluctant to see the company join a large, fast-food group.
Unlike many other chains, Ootoya prepares all of its food on site. Colowide has said it wants to promote more efficiency by introducing the chain to its network of “central kitchens” or commercial cooking hubs serving multiple restaurants.
Ootoya has said such a system, common among cheaper, nationwide dining chains, would lessen its appeal to customers.
Ootoya has faced pressure from higher labour and food costs. The pandemic has also hit sales, with customers avoiding dining out.
Colowide came upon Ootoya shares after the sudden, 2015 death of Ootoya’s founder Hisami Mitsumori prompted a boardroom battle and the exit of his son, Tomohito, from the company. Tomohito and his mother eventually sold their shares to Colowide.
Ootoya shares closed on Tuesday at 2,700 yen. Colowide has said it plans to keep them listed. (Reporting by Ritsuko Ando and Rocky Swift; editing by Jason Neely and Nick Tattersall)
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