By Anton Bridge and Yuka Obayashi
TOKYO (Reuters) -Japanese mobile carrier KDDI Corp announced on Tuesday a 500 billion yen ($3.4 billion) tender offer for convenience store chain Lawson to jointly operate it with the target’s majority owner Mitsubishi Corp.
KDDI made the offer at 10,360 yen per share, or around a 16% premium to Lawson’s closing share price of 8,913 yen on Tuesday.
Lawson said its management backed the proposal, which will commence in April.
Trading firm Mitsubishi holds just over 50% of Lawson’s shares and KDDI owns 2.11%. If the deal goes through, both firms would hold 50% of Lawson’s voting rights each, KDDI said.
Lawson and KDDI intend to integrate the goods and services at their physical locations and combine KDDI’s customer attribute and location data with Lawson’s purchase data to establish one of Japan’s largest customer data platforms, they said.
Lawson also aims to enter the e-commerce industry, taking advantage of its convenience store network to offer fast delivery, its president said at a press briefing.
Mitsubishi said separately on Tuesday it would spend as much as 500 billion yen to buy back up to 10% of its own shares, part of its strategy to boost shareholders’ returns.
The buyback plan was announced after the company reported a 27% drop in April-December net profit to 696.6 billion yen due to lower prices for coking coal and smaller gains from its real estate business.
Lawson is the single-biggest profit contributor for Mitsubishi’s consumer industry group of companies, accounting for around a half of the 38 billion yen profit made by the trading house in that segment in the nine-month period.
Mitsubishi reiterated its forecast for a profit of 950 billion yen for the year through end-March, below a 983.9 billion yen average estimate in a poll of 10 analysts compiled by LSEG.
Japan’s Nikkei newspaper first reported on the buyout offer shortly before markets closed on Tuesday.
($1 = 148.4600 yen)
(Reporting by Satoshi Sugiyama, Anton Bridge, Yuka Obayashi, Mariko Katsumura and Katya Golubkova; Editing by Kim Coghill, Miyoung Kim and Tom Hogue)
