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Colowide : succeeds in hostile takeover bid over Ootoya

09/08/2020 | 04:58am EDT

Japanese restaurant chain operator Colowide Co. said Tuesday it has succeeded in an extended hostile takeover bid over Ootoya Holdings Co., the struggling operator of Japanese-style set-menu eatery chain restaurants.

Colowide, which runs a wide range of Japanese-style pubs and restaurants including the grilled beef eatery chain Gyu-Kaku, said it has obtained about a 47 percent stake in Ootoya, above the targeted lower limit of 40 percent.

The takeover bid was launched on July 10, with Colowide offering 3,081 yen per share -- a 46 percent premium on the Ootoya stock price which ended at 2,113 yen the day before the July 9 announcement of the proxy fight.

Colowide had initially planned to accumulate its stake in Ootoya to at least 45 percent in the tender offer through Aug. 25, but it extended the deadline to Tuesday and revised downward the lower limit to 40 percent to increase the possibility of a successful takeover bid.

Colowide plans to reshuffle Ootoya's current management and introduce cost-cutting efforts to improve the latter's performance by sharing its central kitchens and other logistic facilities as well as joint procurement and food distribution.

Colowide has said a 40 percent stake is expected to be enough to reshuffle Ootoya's directors, as less than an 80 percent voting right has been exercised at Ootoya's recent shareholders' meetings.

Before the takeover bid, Colowide held a 19.16 percent stake in Ootoya after obtaining shares last year from Mieko Mitsumori, the widow of Ootoya founder Hisami Mitsumori, who died in 2015, and their oldest son Tomohito.

Ootoya has opposed the hostile takeover by Colowide and requested its shareholders not to sell their shares to the izakaya restaurant operator, while Colowide said Ootoya's menu was too pricey for its customer base.

Ootoya said it takes pride in offering what it calls healthy "mom's food" cooked on-site at each restaurant and argued Colowide's method of distributing prepared meals from its central kitchens to its outlets will "clearly lower" the quality of food.

The two companies have both been eager to expand their businesses in overseas markets. As of the end of March, Colowide operated 227 overseas outlets in 12 countries and regions including the United States and Taiwan, while Ootoya ran 116 restaurants in foreign countries including Thailand, Vietnam and Indonesia.

But the coronavirus outbreak has hit the restaurant operators hard, with Ootoya posting a net loss of 1.51 billion yen ($14 million) in the April-June quarter on sales of 3.16 billion yen, down 48.1 percent from a year earlier.

Colowide reported a net loss of 5.40 billion yen in the same period on sales of 30.48 billion yen, down 48.4 percent from the previous year.


© Kyodo News International, Inc., source Newswire

Stocks mentioned in the article
ChangeLast1st jan.
COLOWIDE CO.,LTD. -0.20% 2014 End-of-day quote.23.33%
OOTOYA HOLDINGS CO., LTD. -0.33% 2737 End-of-day quote.21.11%
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Sales 2021 168 B 1 531 M 1 531 M
Net income 2021 -9 728 M -88,6 M -88,6 M
Net Debt 2021 138 B 1 258 M 1 258 M
P/E ratio 2021 -13,9x
Yield 2021 0,26%
Capitalization 151 B 1 373 M 1 376 M
EV / Sales 2020 1,05x
EV / Sales 2021 1,67x
Nbr of Employees 5 625
Free-Float 76,8%
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