Cerberus launches selldown of up to $878 million in Japan’s Seibu: Reuters

(Reuters) — U.S. private equity firm Cerberus Capital Management LP on Thursday launched a selldown of up to $878 million in railway firm Seibu Holdings (9024.T), IFR reported, citing a term sheet of the transaction.

The move comes as Cerberus pulls back from Japan after failing to win control of Seibu, with 15 senior executives leaving the firm this year.

Cerberus is offering 33.75 million shares of Seibu in an indicative range of 3,055 yen to 3,150 yen each, putting the total deal at up to 106.31 billion yen, added IFR, a Thomson Reuters publication.

The price is equivalent to a discount of up to 7.4 percent to Thursday’s close.

Cerberus didn’t immediately return a Reuters request for comment on the Seibu selldown.

The offer is equivalent to about 10 percent of Seibu’s outstanding shares, according to the term sheet, leaving Cerberus with stake of about 25 percent in the rail, bus and hotel operator.

The New York-based firm was among the early U.S. investors, along with Lone Star and Goldman Sachs (GS.N), in Japan’s failed banks and hotels after the country’s asset bubble burst in the early 1990s.

It became widely known in Japan in the 2000s when it invested in companies including Aozora Bank Ltd (8304.T).

The firm led a bailout of Seibu in 2006 after a delisting resulting from a scandal over falsified shareholder records. After clashing with the company over its IPO, the fund unsuccessfully tried to take control of its board.

Seibu’s stock has soared nearly 66 percent over the past year, outstripping a gain of 44 percent in the benchmark Nikkei 225 index .N225.