BENTONVILLE, Ark. and TOKYO Wal-Mart Stores is making an offer to buy all of the outstanding shares of it Japanese subisidiary, Seiyu, that it does not already own. According to Wal-Mart, the offer is backed by Seiyu's board of directors, which today passed a resolution of support.
Wal-Mart announced that the tender offer price is 140 yen ($1.19) per common share, which represents a premium of 60.9 percent over the closing price on the Tokyo Stock Exchange on Oct. 19, and a premium of 34.6 percent over the average closing price for the prior three months.
Wal-Mart currently owns 50.9 percent of Seiyu. The tender offer represents an additional investment by Wal-Mart of up to 100 billion yen (approximately $862 million).
"Today's announcement is a reaffirmation of our commitment to Japan, the second largest economy in the world," said Mike Duke, vice chairman of Wal-Mart Stores. "The Japanese retail market is of major strategic importance to Wal-Mart, and our goal is to achieve long-term success and growth in Japan."
According to Wal-Mart, the tender offer will begin on Oct. 23 and will close on Dec. 4. The company said its minimum objective would be to gain ownership of at least two thirds of Seiyu's common shares. Following a successful tender offer, Wal-Mart said it will move to acquire all of the remaining shares, which would result in the delisting of Seiyu shares from the Tokyo Stock Exchange.
Seiyu and Wal-Mart entered into an alliance in May 2002. Wal-Mart became the majority owner of Seiyu at the end of 2005, and has since committed substantial resources with the aim of improving Seiyu's corporate value.