DJ: Cerberus To Launch Tender Offer To Up Stake In Seibu

TOKYO--U.S. private-equity fund Cerberus Capital Management LP said Monday it will launch a tender offer to raise its stake in Seibu Holdings Inc. to above one-third from the current 32.4%, allowing it to veto major board proposals at shareholders' meetings.

Cerberus, the biggest shareholder in the railway and hotel operator, said it will offer Y1,400 per share in an offer that will run from Tuesday through April 23.

The price represents a 188.66% premium on Seibu's closing stock price of Y485 in December 2004, when its core entity, Seibu Railway Co. was delisted from the Tokyo Stock Exchange. The company was delisted for making false statements on its securities report, a charge Seibu admitted.

The New York buyout fund also said it will recommend Hirofumi Gomi, former commissioner of Japan's Financial Services Agency, and other former corporate executives as new board members "to strengthen Seibu's internal control and corporate governance."

The move comes amid an intensifying dispute between the two companies over Seibu's plans to go public again.

Cerberus, which took its stake in financially struggling Seibu in early 2006, is demanding that Seibu hold off from relisting until it can command a higher share price, according to people close to the matter.

Seibu initially planned to relist last year, but was blocked by objections from Cerberus over the proposed IPO price, the people said.