February 6, 2014 / 7:11 AM / in 4 years

Eyeing IPO, Japan's Seibu rehires Cerberus hotel executive

TOKYO, Feb 6 (Reuters) - Japan’s Seibu Holdings said on Thursday it would reinstate a senior executive recommended by Cerberus Capital Management LP in a sign the railway and hotel group is seeking to improve relations with its top shareholder ahead of a planned IPO.

Prince Hotels and Resorts said in a statement that Stan Brown, 54, would become its director and executive vice president starting on Friday. The company manages a network of hotels and is one of the Seibu group’s core divisions.

Brown had been effectively ousted last year when Seibu did not put him up for reelection as director of the division. The former Marriott International Inc executive was also on the Cerberus slate of directors rejected by Seibu Holdings shareholders in June.

The rehiring of Brown is the latest signal that Seibu is looking to work more closely with Cerberus in a bid to improve its operational performance ahead of a possible relisting of its shares later this year.

The two had been locked in a bitter public feud for most of 2013 that centred on when it would go public and at what price.

While Seibu has been eager to relist quickly to fulfil a pledge to give all its shareholders a liquid marketplace to sell their stock, Cerberus has pushed for governance and strategic changes to maximize the IPO price.

Seibu applied to list its shares on the Tokyo Stock Exchange in January, sources have told Reuters. The offering could be worth more than $1 billion, making it one of Japan’s biggest in 2014.

While Seibu does not technically need Cerberus’ blessing to press on with an IPO, a lack of cooperation would likely make the offering difficult since the U.S. fund holds by far the largest block of stock with a stake of 35.48 percent.

The thawing in relations is the result of talks between Seibu President Takashi Goto and Cerberus founder Stephen Feinberg over the last month or so, people familiar with their discussions have said.

Seibu was delisted in 2004 in the wake of a disclosure scandal and Cerberus led its bailout with a $1 billion-plus investment.

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