Unizo Back on the Asset Manager’s Target List

A hostile takeover of Unizo Holdings may happen. And the buyer could be alternative asset manager Blackstone Group. The private equity giant seems very determined to close a deal to buy Japanese based hotel and real estate development firm.

The speculation comes a week after Unizo turned down a takeover offer from Blackstone. To get the deal done, Blackstone announced a 5000-yen tender for Unizo in an attempt to execute a takeover.

Unizo Holdings and Blackstone Group

Unizo became a target last year when H.I.S. Co, a travel services company in Japan, made an offer to buy the firm. Unizo rejected the bid. However, the attempted takeover caught a lot of companies’ attention because Japanese accounting rules implied that Unizo’s real estate was undervalued.

Both the Blackstone Group and Fortress Investment have made offers. Softbank also made an offer in August. However, Unizo has rebuffed takeover attempts.

Activist Investor  Would Welcome Hostile Takeover

Activist investor Elliott Management also entered the fray.

Paul Singer’s hedge fund has accumulated more than 13% of the stock. The activist has pushed Unizo management to sell the company sooner rather than later. Unizo is trying to hold off a deal by inserting new rules that would put the firm’s future in the hands of employees and not shareholders.

If implanted, the rules would prevent Blackstone Group or any other buyer, from systematically selling off its assets to reap the profits between the share price and the net asset value of the properties. This price gap could be as much as 50%, according to some analysts.

A hostile takeover is a rare event in Japan. But private equity funds all over the world are watching to see if Blackstone can execute on its Unizo bid. A $228 billion market exists for publicly listed real-estate companies in Japan. Due to accounting rules, a significant chunk trade below their net asset value. A successful takeover in Japan could drive a flurry of M&A activity in the sector.

[Related: Blackstone Continues Real Estate Buying Spree]