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Cerberus-Backed Seibu Said to Hire 5 Banks for Japan IPO

Cerberus Capital Management LP, a private-equity firm, plans to increase its holdings in Japanese rail and hotel operator Seibu Holdings Inc. as it aims to install a new team of directors.

Cerberus plans to raise voting rights in Seibu Holdings to as much as 36.4 percent from 32.4 percent through an offer to buy outstanding shares at 1,400 yen ($14.57) each, according to a statement distributed today at the Tokyo Stock Exchange.

The firm, which is based in New York and oversees more than $20 billion, also plans to recommend Hirofumi Gomi, a former commissioner of Japan’s Financial Services Agency, Masaharu Ikuta, former president of Japan Post, and Yuji Shirakawa, former chairman of Citigroup Global Markets Japan as board of directors at a shareholders’ meeting scheduled in June, according to the statement.

Cerberus, Seibu’s biggest shareholder, has hired five banks for a proposed initial public offering of the rail and hotel operator, a person with knowledge of the matter said last May. The sale may raise as much as 1 trillion yen, according to a Reuters report published on May 11, citing four unidentified people with direct knowledge of the plan. Spokesmen for the five banks all declined to comment when contacted by Bloomberg News in May.

Seibu declined to comment on a possible IPO of the company, Shuhei Akasaka, a spokesman said by telephone from Saitama, Japan, today.

The company is the seventh-largest railway operator in the Tokyo area by ticket sales, according to figures from East Japan Railway Co. (9020), the largest rail operator. It had 95.1 billion yen of ticket sales in the fiscal year ended March 2010, according to JR East. The company’s operations also include hotels, golf resorts and buses.

Cerberus took a stake in Seibu after leading a bailout of the train company with Nikko Principal Investments Japan Ltd. in 2005. The rail operator was delisted from the Tokyo stock exchange the previous year after misstating stakes held by shareholders, breaking stock exchange rules.

Seibu was previously run by Yoshiaki Tsutsumi. He amassed a $16 billion personal fortune while at its helm that made him the world’s richest man in 1990, according to Forbes magazine.

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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