Trading house Itochu has decided to launch a tender offer to take Dentsu Soken private in a deal that would end its parent-subsidiary listing structure with Dentsu Group. Itochu will acquire almost 75 million Dentsu Soken shares at ¥2,880 each, valuing the deal at roughly ¥215.2 billion ($1.3 billion), according to a statement on Monday. The tender offer is set to begin around early November and be completed around early December.
It will be conducted via a vehicle that is 80% owned by Itochu and 20% owned by its subsidiary, IFP. Dentsu Soken’s parent, Dentsu Group, will not tender its shares and will collaborate with Itochu in managing the business after the acquisition. Dentsu Group currently holds a roughly 62% stake in Dentsu Soken, which offers IT services and consulting.
If the tender offer succeeds, it will be the latest in a string of deals involving Japan’s so-called parent-child listings, whereby both a parent company and its subsidiary are listed. Such companies have become targets of activist investors in recent years as the setup is seen as a poor use of capital. Activist Oasis Management holds a 5% stake in Dentsu Soken, according to Bloomberg-compiled data.
As part of the planned acquisition, Dentsu Soken will enter into a business alliance agreement with Itochu Techno-Solutions to collaborate on IT infrastructure in light of rising demand for AI implementation, according to Monday’s release. Dentsu Soken’s shares fell as much as 2.2% on Monday morning and were trading at ¥2,855 as of 11:00 a.m. in Tokyo. Itochu shares fell as much as 1% while Dentsu Group fluctuated between gains and losses.
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