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Goldman-backed J Trust Drops Out of Takefuji Sale

J Trust Co., which reportedly had backing from Goldman Sachs to help fund its bid for failed Japanese lender Takefuji Corp., has dropped out of the running, Reuters reported. J Trust, a real estate and financial holding firm, said that it was not certain bidding would be handled in a fair and transparent manner, Reuters wrote. Private equity firms Cerberus Capital Management and TPG Capital both reportedly bid in a final round of the auction last month.

(Reuters) – J Trust Co dropped out of the race to buy failed Japanese consumer lender Takefuji Corp, saying it was not certain that the bidding would be handled in a fair and transparent manner.

J Trust, a holding firm that operates real estate and financial businesses in Japan, said it had submitted a 31 billion yen ($365 million) bid for Takefuji and had been prepared to take on 700 employees.

Sources with direct knowledge of the matter told Reuters last month J Trust had secured the financial backing of Goldman Sachs for its bid, which was seen as a key factor making it a strong candidate to buy the consumer lender.

J Trust was one of four firms to submit bids in the final round last month, sources said. The other three were private equity firms Cerberus Capital Management [CBS.UL] and TPG [TPG.UL], along with Korean consumer lender A&P Financial, according to the sources.

Takefuji has been seeking an investor to keep it in business after failing in September with about $5 billion in debts, crippled by a 2006 legal ruling forcing it and other consumer lenders to repay past interest and a new cap on lending rates.

J Trust had been seen as a strong contender due to the backing of Goldman and the fact that it already operates as non-bank lending business through Lopro, which it bought out of bankrupty last year.

(Reporting by Nathan Layne; Editing by Edmund Klamann and David Holmes)

($1 = 84.960 Japanese Yen)