Cerberus, Nikko face fight for Seibu

Two brothers of ousted Seibu chairman, Yoshiaki Tsutsumi, have reportedly launched a counter bid to the ¥160 billion offer Cerberus Capital Management and Nikko Principal Investments made for a significant stake in Japanese real estate and rail giant Seibu.

The ¥160 billion ($1.4 billion; €1.2 billion) Cerberus Capital Management and Nikko Principal Investments joint-bid for a stake in Seibu Railway could face competition, according to reports. The new offer is coming from two brothers of the company’s ousted chairman, Yoshiaki Tsutsumi.

Based in Saitama, Japan, the embattled Seibu is involved in a range of real estate-related activities, including the operation of a local railway, hotels, golf courses, amusement parks and a baseball stadium.

The first signs of trouble for Seibu, at least publicly, cropped up in October of last year, when stories started circulating that the company was under investigation for misrepresenting its ownership structure. Later in 2004, Seibu was de-listed from the Tokyo Stock Exchange on claims it had filed false financial statements, and last week, in the culmination of the investigations, Yoshiaki Tsutsumi was convicted of fraud and insider trading. He was handed down a fine of ¥5 million and a suspended 30-month jail sentence.

Tsutsumi’s brothers, Seiji Tsutsumi and Yuji Tsutsumi, are reportedly behind the rival offer for Seibu. According to the Financial Times, the brothers’ offer is worth as much as ¥560 billion ($4.8 billion) for the entire company, or between ¥1,150 and ¥1,300 a share. The Cerberus-led offer, by contrast, reportedly values each share at around ¥700, and would only represent a roughly one-third stake in the business.

According to Japan Today, the current president of Seibu, Takashi Goto, is attempting to create a holding-company structure for the business, which would incorporate the Cerberus and Nikko investment.

Yoshiaki Tsutsumi, in 1990, sat atop the Forbes list as the richest person in the world. His father, Yasujiro Tsutsumi, bequeathed to him the control of Seibu Corp. in 1964.