Cerberus, Nikko overcome opposition for Seibu

Cerberus Capital Management and Nikko Principal Investments have agreed to a deal to invest around ¥141bn into troubled Japanese conglomerate Seibu. The deal overcame a counterbid from the brothers of ousted Seibu head, Yoshiaki Tsutsumi.

Cerberus Capital Management and Nikko Principal Investments have overcome a rival bid, and inked a deal to acquire a minority stake in embattled Japanese conglomerate Seibu Railway. According to Reuters, Cerberus will invest ¥94 billion ($800 million, €681 million) into the company giving it a 30 percent stake in the business, while Nikko will invest another ¥47 billion, garnering a 15 percent share.

Cerberus and Nikko were first said to be interested in Seibu at the end of October. Then came reports that the two brothers of ousted Seibu chairman Yoshiaki Tsutsumi were planning to launch a counter bid for the company.

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.

Seibu has struggled ever since allegations of impropriety cropped up in October of last year, when reports came out that the company was under investigation for misrepresenting its ownership structure. Seibu was de-listed from the Tokyo Stock Exchange at the end of last year based on claims it had filed false financial statements, and earlier this month 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, were behind the rival offer for Seibu. According to the Financial Times, the brothers’ offer was worth as much as ¥560 billion ($4.8 billion) for the entire company, or between ¥1,150 and ¥1,300 a share. The counter-offer was reportedly lacking an explanation of how the deal would be financed.

The Cerberus investment, meanwhile, is reported to value the company at $2.7 billion.