E-Malt.com News article: Japan: Steel Partners raises bid for Sapporo brewery, but for smaller stake

The American fund Steel Partners said that it would seek a one-third stake in the Japanese beer maker Sapporo, ending its push for a majority stake, and that it was willing to pay 6 percent more to get it, Reuters reported March 10.

The revised terms, which would cost Steel Partners about ¥50.5 billion, or $494 million, to raise its holding from just below 19 percent, comes after it failed in a court battle last year to overturn another company's anti-takeover defenses - a ruling that underscored the difficulty of hostile bids in Japan.

The revised stake sought is just under the 33.4 percent that would give Steel Partners veto power over management decisions.

Shares of Sapporo jumped as much as 7.4 percent after Steel Partners announced the new proposal.

The shares ended the day up 2.5 percent, outperforming the Nikkei average, which fell 2 percent, but at ¥792 , the shares were well short of the offer price.

The fund said in a statement that it was willing to offer ¥875 per share for a 33.3 percent stake in Sapporo, up from an offer in February last year of ¥825 per share for two-thirds of the brewer.

We are "prepared to upwardly adjust the new offer price if the board provides documentation that reflects additional value," Steel Partners said, adding it wanted talks with the brewer's board.

Steel Partners lost a court case last year in which it sought to block anti-takeover moves by Bull-Dog Sauce, one of several firms in Japan it has either targeted or pressured management to raise shareholder returns.

Steel Partners wants to avoid "unnecessary damage" of the kind caused to shareholders when Bull-Dog Sauce implemented defensive measures, resulting in a 45 percent drop in shareholder value, the fund's managing partner, Warren Lichtenstein, said.

Steel Partners said if the Sapporo board was unwilling to support the revised proposal or negotiate, it must publicly disclose its intentions about any measures it may take if the fund decides to increase its ownership above 20 percent.

Sapporo said in a statement that it would carefully examine and consider the proposal, without giving details.


12 March, 2008