TOKYO Japan's No.1 golf course operator Accordia Golf Co (2131.T) mounted a defense against a hostile takeover bid by smaller rival PGM Holdings KK (2466.T), saying the bid will lower value for its shareholders and announcing it will more than triple annual dividend.
PGM, Japan's No.2 golf course operator, launched a 42.4 billion yen ($514 million) open offer in November to win up to 51 percent control of Accordia Golf to boost its profits in the shrinking industry.
PGM, which was originally set up by a U.S. investment fund Lone Star, had offered 81,000 yen each for 524,105 shares of Accordia. Accordia shares traded at 78,000 yen at 12:11 a.m. EDT, a 47 percent rise since the close of November 15 when the offer was announced.
"Our board members today came to the consensus that the tender offer is not going to result in the maximum benefit of our shareholders. It could even infringe their benefit," Accordia said in a statement on Monday, in its first comments on the bid. It urged shareholders to not sell their shares in the public offer.
Accordia said it will raise the annual dividend payment to 5,500 yen per share from 1,600 yen, adding that the company would use extra cash to increase shareholder value rather than acquisitions of golf courses.
But PGM said that the increase in dividend payment will not help Accordia boost its corporate value over the longer term.
Accordia could boost its value only by combining its operations with PGM, not by giving short term shareholder returns, it added. PGM will keep its offer price at 81,000 yen.
Accordia was originally set up by Goldman Sachs (GS.N).
(Reporting by Junko Fujita and Mayumi Negishi; Editing by Muralikumar Anantharaman and Sanjeev Miglani)