TOKYO—U.S. private-equity firm Cerberus Capital
Management LP has sold a chunk of its stake in Japanese hotel and
railway operator Seibu Holdings Inc. worth more than $800 million,
according to people familiar with the matter.
Cerberus, one of the first big foreign private-equity firms to
enter Japan, has been selling assets in the country in recent
years. It frequently clashed with Japanese management teams and its
dispute with Seibu came to symbolize a clash of Japanese and
Western corporate cultures.
Morgan Stanley MUFG Securities said in a statement Friday that
it sold 33.75 million shares, or about a 10% stake in Seibu, that
it purchased from a Seibu shareholder Thursday. It declined to name
the seller but people familiar with the matter identified it as
Cerberus.
The deal would have netted Cerberus about ¥111 billion
($830 million) based on Thursday's closing price of
¥3,300.
Though it remains the top shareholder in Seibu with a 25% stake,
Cerberus may sell its remaining holdings in phases, according to
market participants.
More than a decade ago, Cerberus invested about ¥100
billion in then-struggling Seibu, whose core unit had been
de-listed for falsifying financial statements.
Cerberus had sought to sell part of its stake in Seibu when it
relisted in April of last year, but backed out at the last minute
because it believed the offering price was too low.
The wait paid off. Shares of Seibu have more than doubled to
around ¥3,700 from its debut price of ¥1,600,
thanks to solid prospects for transportation and hotel businesses.
Seibu's hotel business has benefited from a boom in tourism in
Japan, thanks to a weaker currency and an easing of visa
restrictions for foreign visitors.
Since Cerberus's investment in 2005, Seibu has made efforts to
shed a number of far-flung assets to focus more on core railroad
and hotel operations. It was previously highly diversified in the
leisure sector, with operations that included golf courses, ski
resorts and an amusement park.
In contrast to some Western private-equity funds, Cerberus has
been shedding assets in Japan in recent years. In 2013, it sold its
entire stake in Japanese lender Aozora Bank Ltd., raising around
$1.8 billion. Last year, it agreed to sell its 55% stake in
Japanese property operator Kokusai Kogyo Co. to the company's
founding family for about $1.37 billion.
Cerberus feuded with Seibu at times. While both Seibu and
Cerberus agreed on the goal of a new listing, tensions emerged in
2011 over the timing and the terms. Seibu executives largely cut
off contact with Cerberus, saying they wanted to treat all
shareholders equally, while Cerberus wanted more say in how the
company was run.
The feud went public in March 2013, when Cerberus sought to
raise its representation on Seibu's board over the objections of
the Japanese company. Cerberus raised its stake to 35% from 32%
through a tender offer, allowing more boardroom control. But its
proposals at a shareholder meeting in June, including a bid for
more board seats, were defeated. Its nominees included former U.S.
Vice President Dan Quayle and former U.S. Treasury Secretary John
Snow.
Seibu's chief executive said in an interview last year that the
firm's relationship with Cerberus had improved since late 2013,
when he started talking directly with Cerberus Chief Executive
Stephen Feinberg.
Write to Atsuko Fukase at atsuko.fukase@wsj.com
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