Warren Lichtenstein's Steel Partners offered to pay more per share and cut in half a stake it wants to buy in Sapporo Holdings Ltd. after an earlier takeover bid for the Japanese beermaker was rejected.
Steel Partners offered 875 yen a share to raise its stake in Japan's third-largest beermaker to 33.3 percent, the New York-based fund said in an e-mailed statement. Sapporo last month turned down Steel Partners' year-old offer to buy a 66.6 percent stake for 825 yen a share.
Sapporo closed 9.5 percent below the new bid price in Tokyo after giving up earlier gains, suggesting investors expect another rejection. An acquisition by Steel Partners Japan Strategic Fund (Offshore) LP may ``seriously harm'' shareholder interests, Sapporo said in February.
``Steel Partners wants to reach a happy middle ground,'' said Fumiyuki Nakanishi, an equity strategist at Sumitomo Mitsui Financial Group Inc. in Tokyo. ``They cannot cancel the takeover offer because if they do so, the stock price will plunge, reducing the value of their holdings.''
Sapporo confirmed receiving the letter and said it will respond after giving it careful consideration, the company said in a statement through the Tokyo Stock Exchange.
Show Your Intentions
The offer is worth about 50 billion yen ($489 million), based on Bloomberg News calculations. Steel Partners, which began buying Sapporo stock in 2004 at an average price of about 460 yen a share, said in January it held 19 percent of the brewer.
Steel Partners has urged Sapporo to boost returns by redeveloping property, reviewing its soft-drink unit and improving the marketing of its beers. Sapporo's property holdings account for 71 percent of its enterprise value, while the alcohol business makes up 28 percent, according to Doug Scott, an analyst at KBC Securities in Tokyo.
``We believe that our revised proposal evidences our continued confidence in the company's prospects as well as our ability to respond constructively,'' Lichtenstein said in the statement.
The fund also asked Sapporo to disclose what measures it may take if Steel Partners would increase its ownership above 20 percent without the board's support, today's statement said.
Sapporo shareholders last year voted in favor of anti- takeover measures that would allow options to be issued to dilute the holding of an investor with more than 20 percent of the stock.
In August, the fund failed to win control of condiments maker Bull-Dog Sauce Co. The Tokyo High Court called Steel Partners an ``abusive acquirer'' when it ruled Bull-Dog could proceed with a dilution of the fund's holding.
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