Japanese hotel and railway operator Seibu Holdings announced on Wednesday a price range for its initial public offering that is well below previous guidance, causing one of its major shareholders, U.S. private-equity investor Cerberus Capital Management, to decide against selling.
The reduced share price of 1,600 to 1,800 yen (US$15.68 to US$17.64) is as much as 30% below what was originally quoted as the weak Tokyo market weighed on the deal for the operator of Japanese hotel brands The Prince, Grand Prince Hotel and Prince Hotel.
According to a regulatory filing, Cerberus will continue to hold its current 35.4% stake, reversing an earlier plan to sell 15.5% of the company’s shares in the IPO. At the expected pricing of 2,300 yen a share, the sale would have netted Cerberus more than 100 billion yen (US$986 million).
Seibu has been trying to relist its company on the Tokyo exchange since it was delisted in December 2004 for making false statements on its securities report. Among those supporting Seibu after the delisting was Cerberus, which provided a 100 billion yen (US$986 million) capital injection.
The relisting plan had been on hold for more than a year and a half as Seibu and Cerberus quarreled over how it should be handled. A subsequent attempt by Cerberus to boost its stake in Seibu through a hostile tender offer was rejected by shareholders, but the tension between the two parties has reported eased this year.
Reports suggest Seibu still plans to go public on April 23 in a deal that would value the company at around US$6 billion with other major shareholders set to sell their shares. The final offer price will be announced April 14 as planned, Seibu said.