May 8, 2019 / 10:38 AM / a year ago

Murakami-backed fund extends buyout tender period for Japan's Kosaido

TOKYO (Reuters) - A fund backed by veteran Japanese activist shareholder Yoshiaki Murakami extended the offer period for a buyout tender of Japanese printing firm Kosaido Co by nearly two weeks, amid tensions between the fund and the company over the bid.

Tokyo-based Kosaido emerged earlier this year as the unlikely battleground between Murakami and U.S. private equity giant Bain Capital. Last month, a Bain-backed management buyout foundered after it failed to get enough support from shareholders at a revised 700 yen ($6.37) a share.

Murakami’s Minami Aoyama Fudosan fund has offered 750yen a share. On Wednesday both the fund and Kosaido said the offer had been extended to May 22 from May 10.

Kosaido has said it would remain neutral over the bid, because it was not able to determine whether value would be boosted by Murakami’s fund. But the company has also said there was a possibility that the bid could damage its corporate value.

Minami Aoyama Fudosan said in a statement that argument had no foundation. The company has also said it could not oppose to the bid because offer price is higher than Bain’s.

The fund has argued that Kosaido has been undervalued by the market for too long. The 70-year-old company prints newspapers and advertisements. But the key to the deal may be its 61 percent stake in a funeral hall and crematorium business, Tokyo Hakuzen.

Despite Tokyo’s massive population and the rapid aging of Japanese society, funeral companies have a hard time building new crematoriums given opposition from local communities. That means existing facilities tend to be lucrative.

Reporting by Junko Fujita; Editing by David Dolan and Rashmi Aich

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