Seibu Holdings Inc. is targeting a price of 2,300 yen a share for an initial public offering by investors including Cerberus Capital Management LP, according to two people familiar with the matter.
The investors plan to sell as many as 80.9 million shares in the rail and hotel operator, the Tokorozawa, Japan-based company said in a filing to the Tokyo Stock Exchange yesterday. That would value the deal at 186 billion yen ($1.8 billion). The people familiar asked not to be identified because they are not authorized to reveal the price target.
The transaction would be the largest initial share sale in the country this year after the $3.1 billion deal by Japan Display Inc., which plummeted 15 percent yesterday in its Tokyo trading debut. Cerberus, the New York-based fund overseeing more than $20 billion in investments, is reducing its 35.5 percent stake after failing to get its candidates named to Seibu’s board last year.
A spokesman in Cerberus’s Tokyo office said he wasn’t authorized to comment on the transaction.
Cerberus will sell as many as 53 million shares, Seibu said yesterday. The transaction represents 15.5 percent of Seibu’s outstanding shares, leaving the fund’s holding at about 20 percent.
Citigroup Capital Partners Japan will sell 10 million shares, UBS Securities 6.73 million, Norinchukin Bank 5.95 million and Development Bank of Japan Inc. 5.13 million in Japan and overseas markets, according to stock exchange and finance ministry filings. The shares will be listed on April 23, Seibu said.
Cerberus had increased its stake after seeking a revamp that was rebuffed by Seibu President Takashi Goto. He vowed the hotel and rail operator would make no concessions to Cerberus, which eventually accumulated a 35.5 percent stake after helping bail the company out in 2006.
As part of plan to boost profit at the hotel and rail operator before starting an IPO, Cerberus had recommended Dan Quayle, a former U.S. vice president, John Snow, a former U.S. Treasury secretary, and six others for directorships. Shareholders instead elected the four directors proposed by Seibu in an annual meeting near Tokyo lasting a record four hours and 50 minutes.
Seibu was delisted from Tokyo’s stock exchange in 2004 for breaking exchange rules by misstating ownership stakes.