Skylark Buyout On Hold Due to Japan Quake

Banks have put the $3.4 billion buyout of Japanese restaurant chain Skylark on hold, unwilling to underwrite the deal during the immediate aftermath of Japan’s earthquake, Reuters reported. Private equity firm Bain Capital is in exclusive talks to buy the restaurant chain from Nomura Holdings Inc., Reuters said. The deal, if completed, would become one of the largest private equity buyouts of a Japanese company.

(Reuters) – Banks are unwilling to underwrite the $3.4 billion buyout of Japanese restaurant chain Skylark and have put the deal on hold to assess potential business disruption after Japan’s earthquake, bankers said on Thursday.

Private equity firm Bain Capital LLC is in exclusive talks to buy the restaurant chain from Nomura Holdings Inc (8604.T) in what would have been one of the largest private equity purchases of a Japanese company.

Bain could not immediately be reached for comment.

Bain was aiming to reach an agreement by the end of the March but London-based bankers describe the chances of finalising underwritten financing to back the deal as minimal in the next few weeks.

“The chances of getting this deal underwritten are minimal in the short-term – to get a firm underwriting in the next few weeks will be very difficult,” a London-based loan syndicate head said.

Skylark’s trading could be impacted by the earthquake as the company has closed restaurant outlets and is experiencing difficulties with its food supply chain, he added.

“There is an impact on current trading and the last thing you want to do is underwrite a buyout in those circumstances. You can argue its isolated and things will be back to normal quickly, but maybe they won’t,” the loan syndicate head said.

Banks including Mitsubishi Financial UFJ (8306.T), Mizuho Financial Group (8411.T), Sumitomo Mitsui Financial Group (8316.T) and Shinsei Bank (8303.T) were in talks to provide about 150 billion yen in loans to finance the deal, sources said.

The Japanese banks were not comfortable holding all of the risk, due to the size of the deal, the sector and the fact that Skylark had been restructured, and widened the underwriting request to international banks. (Reporting by Tessa Walsh; Editing by Tim Dobbyn)