Nitori Holdings Co., Ltd. (TSE:9843) is considering acquiring industry peer Shimachu Co., Ltd. (TSE:8184), Nikkei has learned, just as rival DCM Holdings Co., Ltd. (TSE:3050) is in the process of taking over the target. DCM looks to convert Shimachu into a fully owned subsidiary through a tender offer between Oct. 5 and November 16.

Valued at roughly CNY 160 billion ($1.5 billion), the deal prices shares at CNY 4,200 apiece. Shimachu says it supports DCM's buyout, meaning Nitori's bid would amount to a hostile challenge. But Nitori had CNY 233 billion in funds on hand at the end of August, giving the company plenty of ammunition to mount a bidding war.

DCM meanwhile only had CNY 74.6 billion in funds on hand at the end of August, and the company is financing the takeover of Shimachu chiefly through debt. A Nitori executive declined to comment about plans to acquire Shimachu. While Nitori stores sell furniture, Shimachu runs home improvement centers that also sell furnishings and interior accessories.

DCM operates home improvement centers as well.