Japanese property firm Daito Trust Construction Co shelved a planned buyout that could have exceeded US$6bn, after the funds behind the deal failed to raise enough money amid the global credit crunch.
Reuters had reported on Monday that Daito was unlikely to go private this year after Mizuho Corporate Bank had decided not to lend Unison Capital and other funds the money needed to finance the deal.
Daito’s founder and chairman, Katsumi Tada, has been looking to sell his stake of about 30 percent in the company. The Unison-led group has been planning to buy that stake and the remaining shares and take the company private.
Daito said in a statement on Friday that it believes it will be difficult to go through with the buyout due to ‘dramatic changes in the economic environment.’
The company has a market value of about $4.7 billion. A typical premium would likely value the entire buyout at more than $6 billion, people with knowledge of the matter have told Reuters.
Prior to the announcement, Daito’s stock ended down 2.3 percent at 3,900 yen, compared with a 2.7 percent fall in the TOPIX index. Daito shares lost 9.3 percent on the week.
(Reporting by Nathan Layne; Editing by Chris Gallagher)
Source: Thomson Merger News