Japanese restaurant chain operator Colowide Co. said Wednesday it has raised its stake in struggling dining chain Ootoya Holdings Co. to 46.77 percent following a hostile takeover bid.
Colowide, which runs a wide range of Japanese-style pubs and restaurants including the Gyu-Kaku grilled beef eatery, has said it plans to immediately send new directors to Ootoya after an extraordinary shareholders' meeting in hopes of turning the business' fortunes following the takeover bid launched in July and extended in late August.
Colowide said the tender successfully ended Tuesday after it received enough offers from Ootoya shareholders to raise its stake in the set-menu eatery above the targeted lower limit of 40 percent.
Colowide offered 3,081 yen per share -- a 46 percent premium on the Ootoya stock price which closed at 2,113 yen the day before the July 9 announcement of the tender offer.
"The result of the takeover bid is very disappointing. We will do our best for our customers and employees," an Ootoya official said.
The izakaya pub operator plans to replace more than half of the Ootoya board, permitting some of the current members to remain if the two companies reach an agreement on the partial reshuffle.
Colowide will propose a completely new board at Ootoya's extraordinary shareholders' meeting if their talks break down, sources close to the matter said.
Colowide has said it plans to improve Ootoya's profitability by sharing its food processing and logistics facilities as well as by conducting joint procurement and distribution.
Ootoya, which serves home-style cooked meals prepared at each outlet, has opposed the takeover bid saying Colowide's "central kitchen" system will lower the quality of its meals.
© Kyodo News International, Inc., source Newswire