BY Fraser Tennant
Following months of negotiations and counter bids, global private equity (PE) firm Lone Star Funds has won the race to acquire Japan-based company Unizo Holdings Co Ltd for $1.9bn.
The transaction will see Lone Star, in tandem with a number of Unizo employees, acquire all 29,618,824 shares tendered in the offer at ¥6000 apiece in cash. The tendered shares – including those of Unizo shareholders Elliott International and Liverpool Limited Partnership – represent 86.55 percent of Unizo’s outstanding shares.
Furthermore, Lone Star plans to acquire the hotel operator’s remaining shares that were not tendered in the offer. Throughout the long open-bidding process, Unizo had expressed a preference for its employees to be involved in the deal, a scheme which allows a group of Unizo employees to own 73 percent of common shares, while Lone Star would hold the remainder.
Principally engaged in the real estate sector, Unizo has two core business divisions: a real estate business and a hotel business. The company owns and leases office buildings located in central areas of Japan and prime locations in large cities in the US, as well as operating several hotels located in prime locations of major cities in Japan.
In a statement, Unizo said that it had rejected a number of bids due to concerns over securing employment. The hotel operator also stated that it had made a rare request to bidders for Unizo employees to be able to control the new owner’s power to sell assets – a request with which Lone Star concurred and which helped seal the deal.
Based in Dallas, Texas, Lone Star invests globally in real estate, equity, credit and other financial assets. Since the establishment of its first fund in 1995, the firm has organised 17 PE funds with aggregate capital commitments totalling over $70bn.
To acquire Unizo, Lone Star had to outpace a number of fellow bidders, including Fortress Investment Group and Blackstone, which made a sweetened bid for Unizo in January 2020 after its initial October 2019 offer was rejected.
News: Lone Star succeeds in $1.9-billion buyout of Japan hotel chain Unizo