INCJ Announces Its 9th Investment in 2010

Innovation Network Corporation of Japan announced its 9th direct investment in 2010. INCJ is to invest JPY 1.25 billion (USD 15 million) through a third party allotment to Nakamura Choko, a manufacturer of special precision components that utilize abrasion-resistance materials (http://www.nakamura-gp.co.jp/index_en.html ). Nakamura aims to boost the sales of diamond saw wire products, which are used to cut solar power silicons and LED components. INCJ will assist Nakamura to capture a substantial global market share in this rapidly growing segment.

Blackstone Chief on Japan Investments

Blackstone has invested more than USD 2 billion in Japan in the past 6 months - Blackstone CEO Stephen Schwarzman confirmed in an interview with the Nikkei newspaper. The investments were primarily in commercial real estates. He cited cheap valuation and positive prospects for the Japanese economy as the attraction for investments. Mr. Schwarzman commented that Japan could grow nearly 2% next year, which is not bad for an economy with no population increase; and that a strong JPY currency and healthy balance sheets of Japanese corporations enable them to acquire foreign companies and assets very cheaply.

KKR, Morgan to sell Orient Corp Pref. Shares to Mizuho

KKR and Morgan Stanley are selling JPY 30 billion (USD 370 million) preferred shares of Orient Corporation, a consumer credit provider, to Mizuho Financial Group. Orient issued JPY 290 billion preferred shares after falling into a negative net worth in FY 2007. According to the Nikkei report, while Mizuho group obtained a large chunk of the issue, more than JPY 100 billion are held by Itochu Corp, the Development Bank of Japan, as well as Morgan Stanley and KKR. Conversion rights of the preferred shares kicked in last month and Mizuho aims to buy back shares to avoid dilution.

90% of Listed Companies in Japan Consider M&A

More than 90% of listed companies in Japan consider mergers and acquisitions as a key growth driver, according to a survey conducted by Nihon M&A Center Inc. Of the 196 respondents, which include manufacturers and non-manufacturers, 26% said they actively seek M&As, while 65.3% said they consider them if favorable deals come along; 46.7% said they have approached other companies for M&As over the last two years.

YTD 2010, total overseas M&As by Japanese companies were up 24% on the year at 367. Japan's resource-related acquisitions hit a record this year, totaling 35 deals with JPY 860 billion (USD 10.5 billion) according to Recof Corp. Meanwhile, M&As of Japanese businesses by Chinese firms came to 37, up 11 from a year earlier, while those by US firms remained little changed at 35. In monetary terms, M&As of Japanese businesses by U.S. firms are still far higher at JPY 194 billion (USD 2.4 billion) despite a 47% plunge from a year earlier. M&As by Chinese firms were still very modest at JPY 28.8 billion (USD 353 million).

Polaris to Purchase a Restaurant Chain Samukawa

Nikkei reported today that Polaris Capital will acquire restaurant operator Samukawa Food Planning Co. for an estimated JPY 6-7 billion (USD 73-84 million). Samukawa Food operates a total of 74 eateries through 7 restaurant chains in Tokyo and several major cities in Japan (eg., http://www.samukawa.co.jp/isomaru/en/ and http://www.samukawa.co.jp/toriyoshi/en/). Polaris will purchase all Samukawa shares from its founding family and the acquisition will be financed partly by a loan from Tokyo Star Bank. The current CEO, Mr. Samukawa, will remain in charge and Polaris aims to list the company within 4 years. Samukawa's latest sales and operating profits were reportedly JPY 11 billion (USD 133 million) and JPY 1.25 billion (USD 15 million). For Polaris, this is the first deal since July 2008. Polaris invested in 3 deals in 2008 (Nippon Oil Pump, Showa (pharma) and Aucnet) and exited from Q'sain earlier this year.

Sumitomo Group To Set Up The PE Firm

Sumitomo Mitsui Banking Corporation, Sumitomo Corporation and The Sumitomo Trust & Banking Co., Ltd announced that they had, either directly or through a subsidiary, made a joint contribution to private equity investment management company "Rising Japan Equity Inc." Rising Japan Equity will manage a 30 billion yen fund to carry out buy-out investments.

Kansai Paint To Launch Bid for South African Firm

Kansai Paint Co., one of the two largest Japanese paint manufacturers, announced that it will make a takeover bid for major South African Paint maker Freeworld Coatings Ltd., in order to make it a wholly owned subsidiary. Kansai Paint already has a 27.6% stake in the Johannesburg-based firm.

BOJ Tankan Shows Business Sentiment Deteriorated

The Bank of Japan Tankan survey showed that Japanese manufacturers' business sentiment worsened for the first time in nearly two years in the last quarter of 2010. Business managers were concerned with the impacts of the surging yen and slowing overseas economies. The end of government subsidiaries for environmentally friendly vehicles and a down scaling of the government-led eco-point program have apparently been a blow to related industries. However, the decline was less than had been expected by many economists.

Gold-Pak To Go Private With iSigma

Gold-Pak Co., LTD. a Nagano-based beverage manufacturer, announced that Gold-Pak approved the take-over bid from an investment firm set up by iSigma Capita, a middle-market buyout firm and a 100% subsidiary of Marubeni Corporation. The investment firm made the bid at 1641 yen, a 56% premium over its 3-month average. Phoenix Capital, Gold-Pak's largest shareholder, and Tokyu Corp., the second largest shareholder, agreed to accept the bid.

Failed Takefuji To Take Bids For Rehab Sponsor

Takefuji Corp., a bankrupt consumer lender, will start the selection process for a rehabilitation sponsor by asking interested parties to submit the proposal, according to Nikkei. The company has received letters of interest from 20 or so firms/funds as of late October.

Japan's Q3 GDP Revised Up To 4.5%

The Japanese Cabinet announced that real gross domestic product grew an annualized 4.5% during the July-September period, exceeding the 3.9% rise initially estimated a month ago. Consumption and capital expenditures proved stronger than initially thought. But many economists already expect a contraction in the fourth quarter due to slowing exports.

Dainkin In Talks To Buy Goodman

Daikin Industries Ltd., a top-ranked Japanese air conditioner maker, is considering various options for possible mergers and acquisitions in the US. Goodman Global Group is one of the targets, according to Nikkei. Goodman is held by Hellman & Friedman LLC, a San Francisco-based private equity firm.

BoT-M'bishi UFJ To Team With Dutch Investment Promotion Agency

The Bank of Tokyo-Mitsubishi UFJ, Ltd.(BTMU) and the Netherlands Foreign Investment Agency (NFIA) signed a cooperation agreement to promote foreign direct investment in the Netherlands. The agreement is expected to be mutually beneficial. The NFIA will be able to leverage BTMU's network for marketing in the Netherlands by Japanese companies while the NFIA's support will enable BTMU to strengthen its capabilities in the provision of quality information and services to Japanese companies.

Invoice To Go Private Via MBO With MBK

Invoice Inc., a listed service provider of consolidating billings, announced that it will accept a tender offer by an investment company set up by MBK Partners. It will launch the tender offer at 1500 yen which is a 37% premium over its 3-month average. Sumitomo Mitsui Bank will offer up to 12.5 billion yen in financing. MBK is an independent private equity firm specializing in the East Asia region.

Orix To Buy Stakes In Vietnamese Investment Firm

Orix Corp., a lease-oriented conglomerate, has acquired a capital stake in Indochina Capital Corp., an investment firm that specializes in Vietnamese real estate, equities, and infrastructure, according to Nikkei. Orix plans to develop large hotels and office buildings in Ho Chi Minh City, Hanoi, and elsewhere with Indochina Capital.

Unemployment Rate Up To 5.1%

The Japanese Cabinet announced that the unemployment rate in October went up 0.1% to 5.1%. The market consensus was 5.0%. Industrial production in October fell 1.8% from a month earlier, according to the Ministry of Economy, Trade and Industry. But the fall was smaller than the economists' estimates, which were around 3.3%.

Keystone To Eye Y15B For Turnaround Fund

Keystone Partners Co., Ltd., a Tokyo-based private equity firm, is raising upward of about 15 billion yen for its inaugural turnaround fund with a deadline of next June. Keystone has been successful in fund-raising 5 billion yen in dry powder so far from pension funds etc.

Deutsche Bank To Invest In Turnaround Fund

Deutsche Bank AG, Tokyo Branch announced its commitment to invest in a business revitalization fund to be initiated by Japan Industrial Solutions Co., Ltd (JIS). Established by DBJ, SMBC, BTMU and Mitsubishi Corp., JIS was founded on September 29 to manage funds aimed at revitalizing businesses; Deutsche Bank's Tokyo Branch will be a limited partner and capital participant in the planned fund through its Strategic Investment Group.

Japan's Q3 GDP UP 3.9%

The government announced that real gross domestic product increased 3.9% in annualized terms in the July-September period, up from a revised 1.8% growth in April-June. The average consensus was around 2.5%. Strong GDP growth was driven by consumer spending. Households stepped up purchases of fuel-efficient vehicles before government subsidies ended in September. Smokers also stocked up on tobacco before taxes were increased on Oct 1. Economists say the economy could have slowed in the third quarter if the one-off factors bolstering household spending were stripped out. They add that the current fourth quarter is likely to be impacted by a stronger yen, which will lead to a slowdown in exports.

AP To Acquire Guam Tele-com Servicer

Advantage Partners LLP, a Tokyo-based private equity firm, announced that an investment vehicle served by AP will acquire GTA TeleGuam, the leading provider of communications service in Guam from Shamrock Capital Advisors. Shamrock Capital Advisors, a California-based private equity firm, has been a co-owner with GE since the privatization of GTA in 2005.

Sumitomo Tr. To Beef Up Asset Mgt. Business

Sumitomo Trust & Banking Co., an independent trust bank and its subsidiary Nikko Asset Management Co., are in the final stages of acquiring two foreign asset management companies, according to Nikkei. They are Tyndall Investment Management Ltd., a subsidiary of a major Australian financial group and DBS Asset Management Ltd., a subsidiary of Singapore's largest bank, DBS Bank. Sumitomo Group will likely spend up to 10 billion yen to purchase the two subsidiaries.

Mizuho To Acquire Stake In BlackRock

Mizuho Financial Group Inc., one of mega banks, will spend $500 million to take a roughly 2% interest in US asset management giant BlackRock Inc., according to Nikkei. Mizuho will market BlackRock's financial products to Japanese individuals and businesses.

JAIC and CyberAgent To Launch 2nd China-focused Fund

JAIC, a listed Asia-focused VC firm, and CyberAgent, Inc. an internet service company, announced that Japan Asia Investment (China) Co., Ltd, an affiliate of JAIC and Cyber Agent Ventures, Inc. an investment affiliate of CyberAgent, jointly set up a China-focused fund "CA-JAIC China Internet Fund Ⅱ". The fund will start with $15 million to invest in promising Chinese venture capital companies.

Combi To Go Private Via MBO

Combi Corporation, a leading baby-goods manufacturer, announced that Combi approved the tender offer by an investment firm set up by the founding family. The investment firm is launching a tender offer at 1000 yen per share with the total purchase price estimated at 12.2 billion yen. Nomura Capital Investment Co. plans to offer more than 10 billion yen in financing.

Avon To Sell Japan Unit To TPG

Avon Products, Inc. announced that it has agreed to tender its 74.67% share in its Avon Japan business to an affiliate of TPG Capital, a global private equity firm. Under the terms of agreement, TPG will make a cash payment of 7.3 billion yen ($90 million) for Avon's stake and for pre-paid royalties. As part of the transaction, TPG is launching a tender offer in Japan for all outstanding shares of Avon Japan at 74 yen per share. Avon Japan is the only subsidiary in Avon's geographic portfolio that is publicly traded. Avon will focus its business and investment on higher growth opportunity locations like China.

INCJ To Invest In Power Semicon Maker

Innovation Network Corporation of Japan, private-public investment fund, announced that INCJ will underwrite new shares issued by Nihon Inter Electronics Corporation, a listed staggering manufacturer of discrete semiconductors and power module products, for 3.5 billion yen. INCJ will also provide management support through introducing new talents from outside. With this investment as a starting point, INCJ plans to aim for a reorganization of the power-modules market.

Secured Capital To Go To Private

Secured Capital Japan Co., a listed real-estate oriented fund management company, announced that Secured Capital approved the tender offer by Pacific Alliance Group, a HK-based investment firm, and the management of Secured Capital. Pacific Alliance is the largest shareholder in Secured Capital, holding more than 40% including CBs. Secured Capital is to expand its business to Asia and develop new products like private equity funds with Pacific Alliance.

MUFG To Buy RBS's Project Financing Ops.

Mitsubishi UFJ Financial Group Inc., a leading Japanese mega bank group, plans to purchase the financing business project of the Royal Bank of Scotland for an estimated 4 billion pounds, or roughly 500 billion yen, according to Nikkei. The negotiation between MUFG and the British government, which controls 84% of RBS's voting rights is in the final stage of ironing out the details. They hope to sign a deal by year-end and complete the transaction in the first half of 2011.

PE-backed Software Maker To File For IPO

Private equity-owned software maker group 1st Holding, Inc. has filed for an initial public offering on the Jasdaq Securities Exchange. A core unit of 1st Holding Inc., WingArc Techonolgies, Inc. was acquired by Advantage Partners, a Tokyo-based major private equity firm in 2004.

NEC Capital To Launch Takeover Bid For Risa Partners

NEC Capital Solutions Ltd., a leasing affiliate of NEC Corp, announced that NEC Capital will make a tender offer for Risa Partners Inc., a battered real-estate fund management company. NEC Capital has established a business and capital alliance with Risa in 2009 and by this transaction, will try to make Risa a wholly-owned subsidiary.

Integral To Invest In TV Commercial Maker

Integral Corporation, a Tokyo-based private equity firm, announced that Integral will acquire a 44.4% in TYO Inc, a second-ranked TV commercial producer. Integral is to pay 1.3 billion yen for new issues, becoming the largest shareholder.

Mizuho To Launch Y10bn Small-Business Fund

Mizuho Bank will start a fund to invest in small and midsize companies, with about 10 billion yen in capital, according to Nikkei. The fund will invest about 1 billion yen at a time, buying preferred stock, subordinated loans and other assets. The Mizuho Financial Group Inc. subsidiary will put up 3 billion yen for the fund and raise the rest from life insurers, trading companies and other investors.

SBI and Fudan Univ. To Launch Funds In China

SBI Holding, Inc. a financial conglomerate, announced that SBI and Fudan University, one of China's leading universities in Shanghai will jointly establish two private equity funds in China. One fund will be US$ based and the other RMB based. SBI and Fudan plan to engage in joint fund raising activities for the RMB fund in China. SBI will establish a fund management company in China to manage both funds. SBI has so far established JV funds with Beijing University and Tsinghua University. In China, major universities serve as the basis for the formation of industrial groups. So this time the funds will invest in start-ups and related companies of Fudan who mainly focus on the fields of biotechnology, green technology, IT, media and alternative energy.

Kyowa Hakko Kirin To Sell Chemical Unit to JIP

Kyowa Hakko Kirin Co., a major fermented chemical manufacturer, announced that it will sell its wholly-owned subsidiary, Kyowa Hakko Chemical Co., to Japan Industrial Partners, a Tokyo-based private equity firm. Kyowa Hakko Kirin, by divesting the chemical unit, concentrates on the field of medical products and pharmaceuticals.

Mamiya-OP To Acquire Golf Maker From Next Capital

Mamiya-OP Co., a listed manufacturer of electronic equipment, announced that Mamiya will acquire 91.2% of shares in Kasco Co., a golf maker, mainly from Next Capital Partners, a Tokyo-based private equity firm. Mamiya already supplies golf shafts to US makers on its OEM base and with this acquisition, decided to become a golf equipment manufacturer. Kasco, with an investment from Next Capital in 2006, has expanded business.

ORIX To Acquire US Asset Manager

ORIX Corporation, a financial conglomerate, announced that the ORIX USA Corporation will acquire a majority interest in MIG Holdings, LLC, the parent company of Mariner Investment Group, a leading hedge fund and alternative investment manager. Mariner Investment Group, founded in 1992, manages $11.7 billion with 166 employees in NY, Boston, London and Tokyo. ORIX will focus its asset management business in the US.

Asahi Tec To Sell Water Treatment Subsidiary To Nippon Mirai Capital

Asahi Tec Corporation, a major manufacturer of malleable iron casting products, announced that it will sell all shares in its consolidated subsidiary, Asahi Tec Environment Solution Company (ATES) to Nippon Mirai Capital, a Tokyo-based private equity firm. By divesting ATES which manufactures and markets water supply and sewerage equipment and water treatment devices,
Asahi Tec will focus on its automobile business to deal with robust demands from developing countries.

Japan Snapping Up Foreign Bonds At Record Pace

Japanese investors went on a foreign bond purchasing spree in the January-September period, with net buying jumping 60% on the year to 20.94 trillion yen, far above the full-year record of 15.85 trillion yen set in 2005, according to Nikkei. The major buyers are the banking sectors who accounted for about 60% of the period's foreign debt purchases.

Morgan Stanley To Roll Over Loans For ANA Hotel Deal

Morgan Stanley and lenders have reached an agreement to roll over loans arranged for the US investment bank's acquisition of 13 hotels from the All Nippon Airways group in 2007, according to Nikkei. Morgan Stanley acquired the hotels for 381.3 billion yen, contributing 55 billion yen itself with the rest consisting of three year-year loans from Shinsei Bank, Citi Banks and GSIC. Citi is believed to have been replaced by Sumitomo Mitsui Banking Group this time.

Apparel Makers Merge To Weather Shrinking Market

Sanei-International Co. LTD. and Tokyo Style Co., LTD. announced that they will establish a new holding company on June 1, 2011 through a joint share transfer. Both companies are listed on the first section of TSE and the new holding company will be the third largest apparel maker following World Co. and Onward Holdings Co.

DeNA To Buy Social Game Developer

DeNA Co., a TSE-listed operator of SNS game sites as well as e-commerce sites on mobile phones, announced that it will pay up to $403 million to buy ngmoco Inc., a San Francisco firm that makes mobile social games like Touch Pets, We City and Godfinger. As DeNA aims to be the largest gaming platform in the world, this acquisition is part of their overseas expansion. DeNA will pay a total of $303 million in cash and stock when the deal closes on Nov.9. If the ngmoco is able to meet certain performance targets, DeNA will pay up to an additional $100 million in cash and equity. The major shareholders of ngmoco are KPCB Holding, Institutional Venture Partners, Northwest Venture Partners.

GPIF To Buy Emerging-Market Stocks Next Summer

The Government Pension Investment Fund (GPIF), which AUM is about 117 trillion yen, plans to expand its investment portfolio to include emerging-market stocks next summer, according to Nikkei. The GPIF has mainly invested in Japanese government bonds and other domestic debt securities with around 9% in foreign securities. It plans to revise its investment guidelines to buy shares listed in the BRICs, South Africa, Mexico and other emerging countries.

Dentsu To Establish The Dentsu Digital Fund

Dentsu Inc., Japan's largest advertising agency, and its affiliate, Dentsu Digital Holding Inc. (DDH) announced that they will jointly contribute up to a total of 10 billion yen to establish the Dentsu Digital Investment Business Limited Partnership ("Dentsu Digital Fund"). The objective of the fund is to accelerate the growth of the Dentsu Group's digital businesses and to contribute to the healthy development of the digital communications market not only in Japan but also in countries such as the United States and China. The newly established fund will be operated by DDH.

BOJ Returns To Zero Rate Policy

The Bank of Japan announced today that it would guide the overnight call rate at a range of zero to 0.1% from the previous target of 0.1%. The BOJ also set up a 5 trillion yen fund to buy assets ranging from government bonds to commercial paper and corporate bonds, and will accept another 30 trillion yen of those assets as collateral under a loan scheme.

AP To Roll Up Condo. Maintenance Business

United Communities Co., a holding company of condominium management and renovation companies, announced that it will acquire Marimo Community Co., a Hiroshima-based operator of condo. maintenance services. United Communities is a portfolio company of Advantage Partners, one of the major private-equity firms in Japan. It recently bought Yoko Building System Co. and it will rank 9th in the industry with the Marimo deal.

Jobless Rate Down to 5.1% in Aug

The ministry of Internal Affairs and Communications announced that the seasonally adjusted unemployment rate fell to 5.1% in August from 5.2% in July. The same ministry, in a separate report, stated that the core consumer price index, which excludes fresh food, fell 1% in August from a year earlier. The jobless rate has improved but deflation still continues.

J-Star to sponsor a MBO of Apo Plus

J-Star has sponsored an MBO of Apo Plus Station, a provider of contract marketing services to drug and medical devise industries. J-Star made an equity investment of JPY 0.43 billion (USD 5 million) to hold a majority stake. Apo Plus is the second largest CSO in Japan and its annual sales were JPY 5.5 billion (USD 65 million) for the March 2010 period. It plans to increase its medical representatives from the current staff of 350 to 550 in the next 3 years.

DBJ, 2 Mega Bks & Mitsubishi Co To Set Up Turnaround Fund

The Development Bank of Japan (DBJ), Sumitomo Mitsui Banking Corp (SMBC), Bank of Tokyo-Mitsubishi UFJ (BTMU) and Mitsubishi Co. announced that they will set up a corporate rehabilitation fund with 30 billion yen to invest. They will also establish "Japan Industrial Solutions Co." to manage the fund as a GP.

Takefuji Files For Bankruptcy

Takefuji Corp. a listed leading consumer lender filed for bankruptcy protection with Y 433.61 billion in outstanding debt. Takefuji was Japan's biggest lender with outstanding loans of 1.77 trillion yen in 2002, but it has fallen to the fourth with a loan size of about 589 billion yen in 2010. All consumer loan firms have been burdened by mounting claims by customers for reimbursement for excessive interest charges.

3i To Buy Mizuho Investment Management(UK)

3i Group plc, one of the largest private equity firms in Europe, announced that it has reached an agreement with Mizuho Corporate Bank to acquire Mizuho Investment Management (UK) Limited. Mizuho Investment Management is the leading debt management business in Europe with assets under management of 3.7 billion GBp. The acquisition consideration is 18.3 million GBp.

Prudential May Purchase 2 AIG Units

US giant Prudential Financial Inc. is expected to acquire AIG Edison Life Insurance Co. and AIG Star Life Insurance Co. from American International Group Co., according to Nikkei. AIG already sold its insurance unit Alico Japan to Met Life this year. These moves by AIG have been in line with its first priority to repay taxpayers who are owed more than $90 billion from a government bailout. Prudential plans to build up a more solid foundation in Japan by acquiring those 2 units.

Public-Private Infrastructure Fund To Start With Y50bn

A proposed public-private fund to promote infrastructure investment will likely begin with 45-50 billion yen, according to Nikkei. The government is considering launching the fund next fiscal year, mindful of the difficulty in allocating funds for public works amid tight fiscal constraints. It is hoping to tap private-sector money to carry out infrastructure development projects.

Banks' Net JGB Buying Hits Record In 1st Half

Domestic banks bought 14.5 trillion yen more in Japanese government bonds than they sold in the January-June period, the largest net purchase for a half year since comparable dates became available in 2004, according to Nikkei. The data highlights the lackluster situation in which the banks had little choice but to invest idle cash in JGBs as businesses and individuals, lacking confidence in Japan's economic outlook, refrained from borrowing.

Govt-backed PE Fund To Help 2 Die Firms To Merge

Fuji Technica Inc., the second-ranked metal mold manufacturer, announced that it will acquire Miyazu Seisakusho So., the third-ranked mold maker, with financial help from the ETIC, a government-backed turnaround body. Miyazu, which has closed down one of two factories and trimmed its workforce from 450 to 130, will transfer its operations to Fuji and begin the liquidation process.
The ETIC will invest 5.3 billion yen in Fuji Technica while Fuji Technica will ask major banks including Shizuoka Bank to securitize a total of 3.13 billion yen in debt.

SBI To Launch Fund With Abu Dhabi's Invest AD

SBI Holdings Inc., a Japanese financial conglomerate, announced that Abu Dhabi financial services firm Invest AD and SBI will set up a new fund management company to invest in Africa, starting with a fund of up to $100 million. The new fund, seeded equally by Invest AD and SBI, will focus on Nigeria, Ghana, Kenya, Egypt, Tunisia and Morocco. It will invest in several sectors, including banking, mining, consumer products and manufacturing, through listed equities, unlisted equities, initial public offerings, as well as pre-IPO.

Incubator Bank To File For Bankruptcy

The Financial Services Agency declared the Incubator Bank of Japan insolvent and ordered a halt of operation for three days through Sunday. The Tokyo-based small business lender plans to file for bankruptcy protection today. The government will insure customers' deposits up to 10 million yen plus interest. The bank was established in 2004 as a specialist in small business loans and ended up with bad loans worth an estimated 170 billion yen.

Orix To Buy South Korean Bank For Y8.5bn

Orix Corp. decided to spend 8.5 billion yen to buy South Korean regional bank Pureun Mutual Savings Bank No.2, according to Nikkei. The Japanese leasing giant has negotiated with parent Pureun Mutual Savings Bank to purchase a roughly 85% stake.

Yen Hits Highest Against $ Since May 95

The yen gained strength Wednesday afternoon, briefly trading at around 83.35 to the dollar, its highest level since May 31, 1995.

Zeria Pharma To Buy Danish Peer

Zeria Phamaceutical Co., a medium-scale pharmaceutical manufacturer, announced that it will acquire an 85% shares in Biofac Esbjerg, a Danish drug company from the founding family. With Biofac being a subsidiary of a chondroitin producer, Zeria will expand its marketing of chondroitin in Europe and the US.

Big Banks, DBJ To Launch New Corporate Rehab Fund

Two major banks are partnering with the Development Bank of Japan to set up as early as month's end a corporate turnaround fund aiming to invest as much as 100 billion yen, according to Nikkei. The Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Corp., and the state-backed DBJ will pool their resources in the turnaround fund, which will help companies back onto their feet.

Internet Firms Spending Aggressively On M&A

Five major Japanese Internet firms spent about 68 billion yen ($806 million) on M&A deals and investments in venture businesses in the January-July period, more than triple the amount they did during all of last year, according to Nikkei. They are Rakuten, Softbbank, Cyber Agent, DeNA and Gree, using the money mainly to move into new sectors such as a social networking, and to expand overseas.

Osaka Securities Exchange Ties Up With Shenzhen Exchange

The Osaka Securities Exchange, the Japan's largest derivatives exchange, announced that it has signed a memorandum of understanding with the Shenzhen Stock Exchange to build a cooperative relationship toward the development of financial markets, especially in the area of the growth markets, in China and Japan.

Coca-Cola West To Buy Juice Maker From Funds

Coca-Cola West Co., the largest Coca-Cola bottler in Japan announced that it will buy a major vegetable juice producer Q'sai Co., which is known as its kale drinks. Coca-Cola West will acquire all the outstanding shares from funds belonging to Daiwa Corporate Investment, Polaris Principal Finace Co. and Japan industrial Partners Inc..

BOJ Further Eases Monetary Policy

The Bank of Japan decided, at an unscheduled Monetary Policy Meeting held today, that it will start providing additional funds with a six-month term in an amount of approximately 10 trillion yen in the fixed-rate funds-supplying operations against polled collateral. With this, the Bank will encourage a decline in market interest rates and further enhance easy monetary conditions.

Asahi To Buy No. 3 Aussie Drink Maker

Asahi Breweries, Ltd. announced that it has entered into a binding share purchase agreement to acquire 100% of the issued shares of P&N Beverage Australia Pty Ltd, the third largest soft drink company by volume in Australia. The total purchase price is $A 364 million. Asahi Group has already acquired Schweppes and plans to integrate Schweppes and P&N to deliver significant growth opportunities and synergies within the Australian and overseas soft drinks businesses.

Wise Partners To Buy Pen Tip Maker From Goldman

Private-equity fund Wise Partners plans to acquire Teibow, the world 's No. 1 manufacturer of pen tips, as early as this week for around 12 billion yen, according to Nikkei. The fund will acquire the shares from Goldman Sachs, subsequently transferring a portion to the state-backed Development Bank of Japan. Wise Partners and the DBJ will jointly oversee Teibow's operations and target earnings growth, eventually guiding the firm to a public offering.

Govt Mulling Private-Public Fund For Infrastructure Projects

The government is working toward establishing a new public-private investment fund to promote the use of private money in infrastructure development, according to Nikkei. The fund will raise money from a number of sources, including individuals, institutional investors and businesses. The government is hoping to use the PFI method to develop a wide range of infrastructure, such as highways, railways, airports, seaports and water resources, with less burden on public finance.

US Investment Firm LaSalle Buys Nasu Outlet Mall

LaSalle Investment Management Inc. announced that it has acquired an outlet mall in Nasu, one of the famous summer resorts. LaSalle purchased Nasu Garden Outlet from Daiwa Land Group. This is the US company's second investment in a Japanese outlet mall.

NTT Date To Acquire English System Firm

NTT Data Corp. announced that it has acquired all outstanding shares in the UK system engineering firm Chelford SAP Solution Ltd. The cost of the purchase, made via German subsidiary Intelligence AG, has not been disclosed. Chelford was proud of its approximately 10 million pounds in sales in 2009.

Mitsubishi Logistics To Make Tender offer For Fuji Logistics

Mitsubishi Logistics Corp., a listed major warehousing company announced that it will launch a tender offer for Fuji Logistics Co., another listed distributor, for 450 yen a share. This price is a 140% premium over its 3-month average. Fuji Logistics's top two shareholders, Fuji Electric Holdings Co. with a stake of 27.4% and Toyota Industries Corp. with 26%, have agreed to accept the offer. Mitsubishi Logistics intends to make Fuji its subsidiary through this operation. Fuji's customer base (Fuji Elec. group) and its expertise on manufactured products complement Mitsubishi's business portfolio.

SOFTBANK To Sponsor WILLCOM Rehabilitation

SOFTBANK CORP. announced that SOFTBANK will be the sponsor for WILLCOM, Inc. due to a strong request by WILLCOM's trustees to directly support their PHS business. On March 12, 2010 SOFTBANK agreed to assume WILLCOM, Inc.'s XGP business and cooperate with a cost reduction of their own PHS business. WILLCOM was to continue its PHS business with an investment from Advantage Partners, a private equity firm.

10-Year JGB Yield Down Below 1%

The benchmark 10 year Japanese government bond yield dropped below 1.0% for the first time in 7 years yesterday. Strong yen which casts a shadow over the Japan's export-oriented economy prompted more investors to buy bonds.

Mizuho Sec. To Invest In India With Tata

Mizuho Securities Co., Ltd. one of the major securities houses, announced that Mizuho and Tata Capital Limited have reached an agreement for future partnership on a wide range of businesses such as the PE business and the wealth management business. For a start, Mizuho will plan to invest in a new growth fund established by Tata Capital General Partners LLP. The objective of this fund is to invest in unlisted companies in the Indian mid-market space using the well-established network provided by Tata companies.

SBI To Launch Fund With Brazilian PE Firm

SBI Holdings, Inc., a Japanese financial conglomerate, announced that SBI will establish a fund management company jointly with Jardim Botanico Investimentos of Brazil, an independent Brazilian asset management firm. A new company will manage the new private equity fund focusing on promising non-listed companies in Brazil with a preliminary size of USD 100 million (50 million from SBI).

Panasonic To Tender Offer For Sanyo & Panasonic Elec

Panasonic Corporation announced that Panasonic will acquire shares of Sanyo Electric Co., Ltd. and Panasonic Electric Works Co., Ltd. through a tender offer. The maximum cost for Panasonic is expected to be 818 billion yen. Panasonic also announced that Panasonic will file a Shelf Registrations Statement in Japan for offerings of shares of common stock.

Panasonic To Turn Sanyo, Panasonic Elec Works To 100% Units

Panasonic Corp. plans to transform Sanyo Electric Co. and Panasonic Electric Works Co. into wholly owned subsidiaries as early as this year at an estimated combined cost of over 900 billion yen, according to Nikkei. By making both firms 1005 units, Panasonic aims to unify management and concentrate resources in such areas as rechargeable batteries and home-use goods.

Monex To Buy HK Online Broker

Monex Group, Inc., one of the major on-line broker firms in Japan, announced that it will acquire 100% shares of Boom Securities Limited, a HK-based online brokerage company. For Monex Group, Boom Securities will be the main bridgehead to penetrate the on-line securities business in Mainland China.

Kirin To Buy Stakes In Fraser & Neave From Temasek Unit

Kirin Holdings Company, Ltd., a Japanese No. 1 beverage conglomerate, announced that Kirin will acquire 205.5 million shares (14.7%) in Fraser and Neave Limited, the largest beverage company in Malaysia and Singapore, from Seletar Investments Pte Ltd. which is a wholly owned subsidiary of Temasek Holdings Limited for about $0.97 billion. This investment will further enhance Kirin's international integrated beverage group strategy in the Asia and Oceania regions.

Top Firm's PE Ratio Hit 19-Month Low

The average projected price-earnings ratio of stocks listed on the first section of the Tokyo Stock Exchange sank to its lowest level since late 2008 according to Nikkei. Falling stock prices and earning upgrades by some firms pushed down the average multiple to 16.33, which is still high compared to the 11.82 for the Dow Industrial Average.

Blackstone May Buy Japanese Real Estate Loans From Morgan Stanley

US investment giant Blackstone Group is close to finalizing a deal to purchase real estate loans with a face value of around 100 billion yen ($1.1 billion) owned by Morgan Stanley's Japanese operations, according to Nikkei. The proposed deal involves non-recourse loans, backed by commercial real estate such as office buildings which are believed to comprise around 30 properties in the Tokyo area. Morgan Stanley started Japanese commercial lending around 2000, securitizing loans for sale to domestic and overseas investors. But the recent financial environment makes it impossible for Morgan to securitize the loans it owns. The world's biggest private-equity firm appears to be ramping up its investment in Japan on the belief that real estate prices are close to finding a bottom.

Sanyo To Sell Semiconductor Unit To US Firm

Sanyo Electric Co., Ltd. (Sanyo) announced that it will sell Sanyo Semiconductor Co., Ltd., a subsidiary of Sanyo to ON Semiconductor Corporation, a Nasdaq-listed supplier of semiconductors and integrated circuits for $336 million. The sale is an effort to divest Sanyo of its non-core businesses under the initiative of parent, Panasonic Corp.

NTT To Buy South African IT Service Provider

Nippon Telegraph and Telephone Corporation(NTT), one of the largest global telecommunications service providers announced that it reached an agreement to buy Dimension Data Holdings Plc, a global specialist IT services and solution provider, for around 286 billion yen( $3.25 billion), launching a tender offer on the London Stock Exchange as early as next month. The acquisition will help NTT expand operations outside Japan.

Renown To Plan To Open 2,000 Stores In China

Renown Inc., announced that it plans to set up at least 2,000 shops in China by 2021 under a partnership with major local textile company Shandong Ruyi Science & Technology Group. The troubled Japanese apparel firm will be a Shandong Rui unit through an extraordinary shareholders meeting to be held on July 29 to approve the Chinese company's obtainment of a 41% stake in Renown.

Mizuho To Raise About $8.4 Billion In Share Sale

Mizuho Financial Group, Inc., one of the largest banks in Japan, announced that it has determined an issue price of ¥130, which is a 3.7% discount to the closing price of ¥135 on the TSE Tuesday. Mizuho has issued 5.609 billion new shares with an over-allotment option of 391 million shares and raised ¥748.02 billion, or about $8.4 billion.

China Buys JGBs While Public Pension Fund Sells

China bought 541 billion yen ($6.17 billion) in Japanese government bonds in the first four month this year. Its aim is to diversify its massive foreign-currency reserves in the aftermath of the Greek government debt crisis. On the other hand, the Japanese public pension fund sold a net of 443.2 billion yen of government bonds in fiscal 2009 because reserves continued to dwindle amid rising benefits payments and falling investment returns. The fund held 79.5 trillion yen of JGBs at the end of 2009, or 11.9% of the outstanding balance.

BOT-Mitsubishi UFJ To Create Fund For BOJ Growth Loan

The Bank of Tokyo-Mitsubishi UFJ announced that it plans to launch a fund to extend loans to companies under the Bank of Japan's new lending facility. The BOJ will provide money with 0.1% to financial institutions that lend or invest in sectors the central bank has deemed promising. The fund is expected to reach up to 150 billion yen; each borrower will receive about 5-10 billion yen for a term of up to four years, with the interest rate being re-evaluated annually.

Machine Tool Orders Up In June

The Japan Machine Tool Builders' association released that machine tool orders rose for the seventh straight month in June, soaring 140% compared to the same month last year. Domestic demand was up 1.7% from the month before while foreign demand was up 4.6%.

Foreign Net Sellers of Japan Stock 2nd Straight Week

The Tokyo Stock Exchange announced that overseas investors were net sellers of Japanese stocks to the tune of 48.2 billion yen for the June 28-July 2 period, marking the second straight week of net sales. For the previous week, overseas investors sold more Japanese stocks than they bought by 138 billion yen.

Regional Banks Support Japanese Firms in Asia

Regional banks are expanding into Asia to open new operating bases and form alliances with local financial institutions. They hope to support Japanese companies from their home regions that are pursuing operations overseas, according to Nikkei. For example, the Bank of Nagoya will set up a branch in the Chinese city of Nantong as early as next year. The Bank of Yokohama established a branch in Shanghai last year. Hokuriku Financial Group Inc. allied itself with a major Vietnamese bank at the end of last year. Hiroshima Bank linked an agreement for a business partnership with Metropolitan Bank and Trust Co., the largest bank in the Philippines.

CITIC raised ¥18 billion for 2nd Japan fund

CITIC Capital Partners announced that its second Japan fund raised ¥18 billion ($200 million) from institutional investors at home and abroad. The fund targets Japanese small to mid-size companies who plan to accelerate business development in China. Using the broad network in China, CITIC has increased the value of portfolio companies. The fund made its first investment in Higashiyama Film Co., a Nagoya-based specialty film processor, and became the top shareholder (63.12%).

DRC To Invest In Climbing Goods Shops

Kojitu Co., Ltd., an Jasdaq-listed climbing goods store operator, announced that it will issue shares to DRC Ⅱ, an Tokyo-based investment firm and Pentaland Group Inc., an UK-based company owning 15 brands of sports and leisure apparel, footwear and sporting goods. Kojitu, using proceeds of about 500 million yen, plans to pay the debt. DRC Ⅱ Fund will becomes the second largest shareholder (16.83%) while Pentland will become a minor one (3.30%).

BOJ Tankan Key Sentiment Turns Positive

The Bank of Japan's quarterly tankan survey of business sentiment showed that Japanese corporate sentiment is improving in a growing number of industries due to strong exports. The diffusion index of business sentiment among large manufacturers swung back into positive territory for the first time in two years, up 15 points from three months earlier to 1.

Jobless Rate Inched Up To 5.2% In May

The Internal Affairs and Communications Ministry announced that Japan's unemployment rate rose for the third straight month in May, up a seasonally adjusted 0.1% points from April to 5.2%. It may reflect companies' cautious stance about adding payrolls due to uncertain economic prospects amid Europe's sovereign debt woes. Japan's jobless rate hit an all-time high of 5.6% in July last year. It fell below 5.0% in January for the first time in 10 months, before rising back above the line in March.

SBI and Jefferies Collaborate To Launch Funds

SBI Holding Inc., a Tokyo-based financial conglomerate, announced that SBI and Jefferies Group Inc. reached a final agreement to jointly establish the 2 funds. The fund, " Jefferies-SBI USA Fund" will target promising private companies in the US. Its initial commitment will be US 150 million, with SBI and Jefferies each contributing half. The other one, " SBI-Jefferies Asia Fund", focuses on attractive companies in Asia, regardless of whether there are listed or not. The initial commitment will be US 50 million (80% by SBI and 20% by Jefferies).

Fortress Plan Y20bn Bad Loan Fund For Japan Investors

Fortress Investment Group will seek to raise more than 20 billion yen for a distressed debt fund exclusively for Japanese investors, according to Nikkei. The yen-denominated fund will buy non-performing loans at a discount from financial institutions and governments world wide and aim to deliver an annual return of about 20%.

Orix To Invest Y10bn In Tokyo Star Bank

Orix Corporation, a listed leasing-centered conglomerate, announced that Orix will invest 10 billion yen in Tokyo Star Bank, a Tokyo-based regional bank, by way of non-voting preferred shares and a business alliance. Tokyo Star Bank will use the capital to strengthen its financial base and enhance its revenue base. Both companies will take the opportunity to pursue future alliances in other business areas. Tokyo Star Bank was acquired by Advantage Partners, a Tokyo-based investment firm in March 2008.

Wise Partner To Sponsor Bankrupt Electrical Appliance Maker

Izumi Product Company which filed for chapter 11 last August announced that Wise Partners, a Tokyo-based investment firm, will sponsor and make the business-transfer agreement with Izumi. Izumi, a Nagano-based manufacturer, specializes in precision machining and grinding.

2 Mid-sized REITs To Merge

Canal Investment Trust Co., Ltd the asset management company of Crescendo Investment Company announced that Canal Investment has decided to acquire all the shares of Japan Single-Residence Asset Management Corp. from Apamanshop Sublease Co., Ltd., Lehman Brothers Investments Japan Inc. and K.K. daVinci Holdings. Crescendo invests in office buildings and rental housing while Japan Single-Residence focuses on rental accommodations and hotels.

Fuji Food To Go Private Via MBO With Valiant

Fuji Food Co., a Tokyo-based producer & distributor of cooked rice, delicatessens sandwiches etc, announced that a vehicle managed by Valiant Partners, a mid-sized investment firm, will conduct a tender offer at 500 yen a share. It is a 24.4% premium over its six-month average. The acquisition cost would be around 7 billion yen.

Kaneka Buys Belgium Biologics Maker

Kaneka Co., a chemical-oriented conglomerite, announced that it has spent 4 billion yen to acquire a majority stake of Eurogentec SA, a Belgian manufacturer of proteins, ligonucleotides and other biologics. Kaneka has a contracted pharmaceuticals manufacturer. It has been developing R&D to produce biopharmaceutical ingredients. Through acquiring Eurogenetic, Kaneka intends to jump-start the business.

Kawasaki Kisen Buys US Distribution Firm

Kawasaki Kisen Kaisya Ltd., one of the major ship operators, announced that it has spent about 2 billion yen to acquire a 51% stake in Air Tiger Express Companies., making the US logistics firm a subsidiary. Air Tiger is the US-based logistics service provider with Chinese companies as its major customers. It employs 750 people and had sales of around 15 billion yen in 2009.

BOJ Unveils $3.3bn Loan Scheme

The Bank of Japan has announced that it will plan to provide up to 3 trillion yen in low interest loans in an effort to spur economic growth. The bank will make the money available to commercial banks to encourage them to lend more to private businesses. Firms in 18 growth sectors including healthcare, environment and energy, tourism, science and technology as well as agriculture, forestry and fisheries will be targeted by the scheme. The plan accompanied the Bank of Japan's decision to keep its key interest rate near zero. The eight-member policy board voted unanimously to leave the overnight call rate target at 0.1%. The bank has not touched the rate since December 2008.

KKR is nearing to acquire recruiting company Intelligence

U.S buyout fund Kohlberg Kravis Roberts has reportedly won the negotiating right to acquire recruitment business unit Intelligence from USEN (HCS 4842).

USEN, the leading cable broadcaster, is in the process of restructuring its business and has been looking for a buyer of the business unit through a bidding process.

Mizuho Capital Partners To Acquire Medical Tribune

Mizuho Capital Partners has agreed to acquire Medical Tribune, a publisher of medical weekly newspapers, from Impress HD (TSE9479) for JPY 5.3 billion (USD 58 million). Medical Tribune, which has 110,000 subscribers, recorded annual sales of JPY 4.9 billion (USD 54 million) and operating profits of JPY 0.65 billion (7.1 million) for the March 2010 period.

In 2003 Medical Tribune completed its first MBO from its German parent company with JAFCO as a MBO sponsor. It was acquired by Impress in 2005, but its management will look for an IPO opportunity again with Mizuho Capital Partners' sponsorship.

April Machinery Orders Rose 4％

Japan's core machinery orders rose 4.0% in April, marking the second straight monthly gain after a 5.4% increase in March.

A 15.4% rise in orders from the transport industry was the major contributor. Distribution companies are looking to buy more trucks, suggesting that a recovery in corporate investment is spreading into wider industry segments. Firms in steel industries are beefing up their production capacities, giving a knock-on effect on domestic demand. Orders in the information services industry also rose by 16.9% as firms purchased communications equipment for business use.

Machinery orders account for about 15% of Japan's gross domestic product.

Foreigners Net Sellers Of Japan Stocks 4th Straight Week

Foreign investors were net sellers of Japanese stock for the week of May 23-29, marking the fourth straight week of outflow, according to The Ministry of Finance data. The Nikkei lost ground amid uncertainty over the European economy and mounting diplomatic tension on the Korean Peninsula. On the other hand, Japanese investors were net buyers of medium-long term overseas bonds as well as overseas stocks.

Riverside Asia Bought Maker of Crystal Oscillator

Riverside Partners KK, a global private equity firm, announced that Riverside Asia FundⅠacquired 100% of shares of NAKA & Co., a Yokohama-based manufacturer of high-end crystal oscillators. Riverside will help NAKA beef up global marketing with Riverside's international connections.

Core CPI Down 1.5% On Year In April

The Ministry of Internal Affairs and Communications announced last week that the core consumer price index was down 1.5% in April, falling for the 14th consecutive month. Overall CPI was down 1.2% from 1.1% in the previous month. The price for education plunged 6.6%, which pushed down the core CPI by half a percentage point, because of the government's decision to scrap public high school tuition fees.

J-Will and Daikyo To Sponsor Failed Condo. Developer

Anabuki Construction Inc., a bankrupt condominium developer, announced that a consortium of Daikyo Inc., one of the largest condo. developers, and J-Will Partners, a Tokyo-based investment firm, won the bid for the firm from among 30 contenders. Since Anabuki filed for court protection from creditors under the corporate rehabilitation law last November, the bankruptcy administrator has held a couple of auctions to select the sponsor of Anabuki's rehabilitation.

Jobless rate Up to 5.1% In April

The Ministry of Internal Affairs and Communication announced that Japan's unemployment rate rose 0.1% from March to 5.1% in April. The number of people without jobs total 3.56 million, up 100,000 from the previous year. It is the 18th straight month of rising unemployment.

Exports Up 40% In April; Trade Surplus Soars

The Ministry of Finance announced that Japan's trade surplus in April was 742.3 billion yen compared to 48.9 billion yen in the same month a year earlier. Japan's exports rose 40.4% in April compared to a year earlier on strong overseas demand for Japanese cars and electrical parts. Exports to Europe were strong, up by 19.8%; exports to the US gained 34.5% and those to Asia climbed 45.3%.

Longreach To Acquire Sanyo Electric Logistics via Tender Offer

Longreach Group will acquire Sanyo Electric Logistics (JASDAQ 9379), a provider of logistic solutions, through a tender offer. The tender offer price is JPY 1,750 per share, a 54% premium over the last 6-month average trading price. The tender offer value is JPY 17.9 billion (USD 200 million). The company's annual sales were JPY 38.1 billion (USD 423 million) and operating profits were JPY 2.2 billion (USD 24.4 million) for the March 2010 period. Sanyo Electric Co. (TSE6794), the company's parent which holds a 57.7% stake, will sell its entire stake in the tender offer as a part of its restructuring plan. Longreach plans to delist the company after the completion of the tender offer. Sanyo Electric will continue to outsource distribution to the company and plans to acquire a 5% stake after Longreach completes its acquisition.

Aozora Bank Set Up Tohoku Region's First Public-Private SME Recovery Fund

Aozora Group announced that it will establish the "Utsukushima Mirai Fund" with the Organization for Small & Medium Enterprises and Regional Innovation, Japan, the Credit Guarantee Corporation of Fukushima and 10 financial institutions in Fukushima Prefecture. This public-private partnership fund will support the recovery of small and medium enterprises in Fukushima Prefecture.

Renown To Become Unit of China's Shandong Ruyi

Renown Inc., a struggling apparel maker, announced that it will issue new shares worth about 4 billion yen to Shandong Ruyi, a major Chiesen textile company. Shandong Ruyi will be its largest shareholder, to surpass Neoline Holdings, a Tokyo-based investment firm, who bought its 24.9% stake in 2008.

Daiwa Fund To Invest In Taiwanese Service Provider

Daiwa Quantum Capital Partners 1, a pan-Asian growth capital fund managed by Daiwa Quantum Capital Limited, has announced that it will invest 15.6 million dollars in Alchip Technologies Inc., a Taiwanese silicon design and manufacturing services company. The proceeds will be used for the expansion of the company's design capacity and working capital.

Japan Q1 GDP Up 4.9%

The Cabinet Office announced that real gross domestic product increased 4.9% from the previous quarter on an annualized pace in the January-March period and 4.2% annualized in the fourth quarter of 2009. Q1 growth was led by a recovery in exports as well as gains in consumer spending and business investments. The GDP deflator was down 3.0% from a year earlier after falling 2.7% in the fourth quarter of 2009.

Shinsei and Aozora Banks Scrap Merger Plan Officially

Shinsei Bank Ltd. and Aozora Bank Ltd, both mid-size Japanese banks with major US shareholders called off a planned merger. The two companies said that they had parted ways after 10 months of unsuccessful negotiations. The announcement was widely expected.

CAS Capital To Sponsor a MBO of Marktec Corporation

CAS Capital has announced that it will sponsor a take-private MBO of Marktec Corporation (JASDAQ 4954), a maker of non destructive testing (NDT) products, through a tender offer. The tender offer price is JPY 1,400, a 42.6% premium over the last 6 month average trading price. The tender offer value is JPY 6 billion (USD 65 million). CAS plans up to JPY 3.52 billion (USD 38 million) of equity investment and up to JPY 2.83 billion (USD 30.8 million) of bank loans. The company forecasts its annual sales at JPY 4.1 billion (USD 44.5 million) and operating profit atf JPY 0.39 billion (USD 4.2 million) for the September 2010 period.

CITIC Capital Japan to acquire Higashiyama Film

CITIC Capital has announced that it will acquire a majority stake in Higashiyama Film (JASDAQ 4244), a maker of coating films, through a tender offer. The tender offer price is JPY 650, a 12.07% premium over the last 6 month average trading price. The company's founding family has agreed to sell its 55.27% stake in the company through the tender offer. The tender offer value is up to JPY 1.34 billion (USD 14.6 million). The company forecasts its half year sales at JPY 3.4 billion (USD 37 million) and operating profit at JPY 45 million (USD 0.49 million) for the 6 month period ending June 2010.

Machine Orders Rise For First Time in 3 Months

The Japanese Cabinet office announced that machinery orders rose 5.4% in May. It was the first gain in three months and better than the forecast percentage of around 5%. In February, it was revised down to -3.8%.

Properst Files For Bankruptcy Protection

Properst Co., a Japanese property developer, announced that it filed for bankruptcy protection with the Tokyo District Court. Properst has 55.4 billion yen ($600 million) in liabilities. It is the second filing by a listed real estate company this year.

Longreach Seen As Leading Bidder For Sanyo Logistics

Longreach Group Ltd., a HK-based investment firm, has emerged as the top prospect to buy Sanyo Electric Co's subsidiary Sanyo Electric Logistics Co., according to Nikkei. Ten or so companies were selected as potential buyers in the first round of bidding for the logistics firm this February. The selection process has narrowed them down to a few candidates, such as Longreach and Nippon Express Co., but the investment firm appears to have offered the best terms. Sanyo Electric Logistics is listed on the Jasdaq market and enjoys group sales of 38.1 billion yen with an operating profit of about 2.2 billion yen.

Public-Private Fund To Invest Australian Water Company

Innovation Network Corporation of Japan (INCJ), public-private fund announced that Mtisubishi Corporation, JGC Corporation, Manila Water Company Inc. and INCJ have agreed to acquire United Utilities PLC's 100% owned subsidiary United Utilities Australia Pty Limited and its Australian related entities. Transaction value is approximately AUD 225 million, comprising AUD 176 million in cash and AUD 49 million in net debt. The participation of INCJ means this is the first water project involving a Japanese public-private consortium outside of Japan.

Public-Private Fund To Invest In Semi-Conductor Start-up

Innovation Network Corp. of Japan (INCJ), a public-private fund, announced that it will invest 2.6 billion yen in Genusion Inc., a Kobe-located fabless flash memory developer. Genusion uses proceeds to develop innovative flash memory technology for customers. It is the second investment for INCJ to support venture companies.

Nippon Mirai to Sell Daiichi Precision Mold to Minebea

Nippon Mirai Capital, a turnaround focused independent buyout fund, will sell its 100% stake in Daiichi Precision Mold, a maker of plastic mold, to Minebea (TSE 6479) according to Minebea's press release. Nippon Mirai originally invested in Daiichi Precision in 2005. No financial terms were disclosed.

March Jobless Rate Rises To 5.0%

Japan's unemployment rate for March rose 0.1% to 5.0%, the Ministry of Internal Affairs reported last week. The record high was 5.6% in July 2009. Job losses remained largely in manufacturing, with the pace of decline in that sector slowing slightly compared to that of the previous month. On the other hand medical, health care and welfare, accommodations as well as eating and drinking service sectors continued to create jobs.

Public-Private Fund To Invest In Wind Power Start-up

Innovation Network Corp. of Japan (INCJ), public-private fund, has decided to purchase a 1.1 billion yen stake in Zephyr Corp., a start-up developing small wind power generators, according to the Nikkei. This is the fund's first investment in a venture company. The Tokyo-based wind power company will use the proceeds to expand its production facilities and overseas sales offices.
Zephyr has fundraised from many VCs and is expected to go public in 2014.

Nomura Principal Sells Stake In Misawa Home

Nomura Principal Finance Co., Ltd., a wholly owned subsidiary of Nomura Holdings, Inc., announced that it will sell its entire stake in Misawa Home Co., to Toyota Home Co., a housing unit of Toyota Motor Co. Nomura Principal invested in Misawa in 2005 and became a top shareholder. Nomura Principal and Toyota, the second biggest shareholder of Misawa, reached the agreement with the understanding that Toyota intends to beef up Toyota Home via strengthening ties with Misawa Home.

NTT Urban To Enter Into REIT Business

NTT Urban Development Co., an NTT-affiliated real estate company, announced that it will acquire a majority of the issued shares in Premier REIT Advisors Co., a midsize REIT operator from Ken Co., Sohgoh Real Estate Co., Chuo Mitsui Asset Management Co., Nikko Properties Co., Across Co., and Developer Sanshin Co. NTT Urban, in addition to the core business of leasing and residential property sales, enters the asset management business through this transaction. With a firm REIT market, some real estate companies who have not engaged in the REIT business have started to buy financially distressed or troubled REIT companies since the new financial year began in April.

Advantage Partners To Fully Exit From Daiei

Advantage Partners (AP) has sold all its remaining stake in Daiei (TSE 8263) to Deutsche Securities according to Daiei's press release. AP originally invested in Daiei in 2005 with co-investor Marubeni to sponsor a restructuring of the ailing retailer. AP partially exited in 2007 but has been holding a 11.7% stake to date.

JPE Acquires Central Hotel Sasebo

Japan Private Equity (JPE), a buyout unit of Japan Asia Investment, has reportedly completed a business succession deal by acquiring Central Hotel Sasebo in Nagasaki Prefecture through JPE's Kyushu focused regional fund. No financial terms were disclosed.

Urban United REIT To Merge With Nippon Commercial

Urban United Investment Corp., a Marubeni-affiliated real estate investment trust, announced that it will merge with Nippon Commercial Investment Corp. Nippon Commercial Investment Corp. has been looking for a sponsor since its parent company Pacific Holdings Inc. filed for chapter 11 last March.

ING Takes Over Real Estate Fund From Creed

The Asian real estate investment arm of ING Group announced that it has taken over management of a 104 billion yen private fund from failed property management firm Creed Corp., according to Nikkei. The fund includes roughly 100 holdings throughout Japan including office buildings, residences and commercial facilities.

Consumer Confidence at Two-year High

The Cabinet Office announced that the consumer confidence index rose by 1.1 points to 40.9. It is the highest figure since October 2007, when it stood at 42.9. The monthly gain was the third in a row. However, an index below 50 indicates that consumers who expect economic conditions to worsen outnumber those who expect an improvement.

MUFG-Affiliated Union Bank Buys Failed US Bank

Union Bank, a California-based institution affiliated with Japan's largest bank Mitsubishi UFJ Financial Group Inc., announced that it acquired substantially all of the assets and deposits of Tamaipais Bank. It is the first time a failed US bank was brought under a Japanese bank's umbrella.

Mitsui Principal Buys Maker of Electric Water Heater

Mitsui & Co., Principal Investments Ltd. announced that it will purchase a 50.1% interest in Nihon Itomic Co., a top manufacturer of industrial-use electric water heaters, from its founding family. Mitsui will assign directors to help jump-start Nihon Itomic's overseas sales.

Iwai Sec. To Acquire Cosmo Sec. From CSK

Iwai Securities Co., an Osaka-based listed securities house, announced that it will purchase a 100% stake in Cosmo Securities Co., another Osaka-based securities company from CSK Holding Corp. Iwai will pay 17 billion yen. The deal was once broken up, but both parties started to negotiate again this month and reached an agreement.

Orix To Promote Environmental Projects With China

Orix Co., a leading integrated financial services group, announced that it will sign an agreement to promote a strategic alliance with the Chinese Academy of Sciences, a top governmental research institution to lead China's IT, biotechnology and other high-tech industries. Through this agreement, Orix and CAS have joined to promote environmental projects in the areas of water power generation, water treatment, solar power, electric vehicles and fuel cells to help China become a low-carbon society.

BOJ Minutes: Some Members Dissented From More Caution

The minutes of the BOJ's March 16-17 policy meeting showed that the two Bank of Japan policy members argued against more cautious steps as the economy recovered. Last month BOJ decided by a split vote (5 to 2) to take more liquidity-boosting steps, doubling the size of its December fund-supplying program.

Mori Trust REIT Purchases Conrad Tokyo Building

Mori Trust Sogo Reit, Inc.(MTR) has announced that it will acquire Tokyo's Shiodome Building for 110 billion yen from Mori Trust Co. The building has 37 floors, including luxury hotel Conrad Tokyo. MTR also announced that it has decided to borrow 88 billion yen from Mizuho Corporate Bank, SMBC and other banks.

Unison Purchases More Ucom Shares From Usen

Unison Capital Inc., one of the major investment firms in Japan, announced that it will acquire more shares of Ucom Corp, a fiber-optic communication firm, from its parent company Usen Corp. Unison already holds about 38% of Ucom's shares and will become the largest shareholder with a 90% interest through this transaction.

Corp. Pension Funds Are Back in Black

Japanese corporate pension funds have posted a positive return for the first time in three years during the financial year to March, according to Nikkei. A survey by Rating & Investment Information Inc. shows that returns for roughly 130 pension funds averaged 14% in 2009 on the back of a 37% jump in the Nikkei Stock average. The yen's strength sabotaged a larger recovery. In 2008 they had lost 17% of their value.

Mizuho Capital To Sponsor Bankrupt LCD Backlight Maker

Nippon Leiz Co., a LCD backlight manufacturer under a court-led civil rehabilitation process, announced that it has appointed Mizuho Capital Partners Co., a Tokyo-based investment firm, as a restructuring sponsor. Mizuho Capital Partners will acquire operations from Nippon Leiz. Under the plan, Mizuho Capital will set up a new firm in July with capital of about 1~2 billion yen. Nippon Leiz management will be invited to invest in the new firm.

BOJ Tankan Improves, but Capital Spending Still Weak

The Bank of Japan's quarterly tankan survey of business sentiment showed the head line index for large manufacturers' sentiment improved to minus 14 in March from minus 25 in December, its best reading since the failure of Lehman. Large manufactures expect the index for June to improve further, to minus 8. But the March tankan also showed that large companies plan to cut their capital expenditures by 0.4% in the fiscal year.

Magara Construction Implements MBO

Magara Construction Co., once listed in the 1st section of TSE, which filed for chapter 11 in July 08, has decided to do a management buyout transaction. After bankruptcy, Magara received capital from Dorgan Investment, a Kyushu investment firm, for 100 million yen in September 2009. This time, a team of current management acquired the stake from Dorgan and will try to finalize a restructuring process with help from Hokkoku Bank, Magara's main financing bank.

INCJ To Invest Alps Spinoff

Innovation Network Corporation of Japan (INCJ), a public-private fund, announced that it will invest in the electronic components unit spin-off from Alps Electric Co., a major comprehensive producer of electronic components. Alps will divest a research joint venture with Tohoku University and establish a new company. The new company deals with technology which can potentially be applied to electric cars and smart grids. INCJ initially invested 3 billion yen and will increase its investment to as much as 10 billion yen.

This is the first and long-awaited investment for INCJ, which was founded last July.

ETIC To Provide Support To Senoh

The Enterprise Turnaround Initiative Corporation of Japan (ETIC), a government-backed corporate turnaround body, has announced it will provide support to Senoh Corporation, a specialized manufacturer and seller of gymnastics equipments.

Senoh was established in 1946 and has been well known as a top supplier for competitive indoor sports. But Senoh, as a diversification of a business portfolio, started to develop a construction and installation business without sufficient know-how or structure. This business brought Senoh into the edge of bankruptcy with heavy debts as well as deficits. Senoh consulted with Resona bank, Senoh's main financing bank and agreed to turn to ETIC for restructuring. ETIC, which considered its support to Senoh as stimulating regional economies and contributing to the development of Japanese lifestyles and society, decided to support the indoor sports supplier.

Chinese Automaker BYD To Buy Japanese Die Factory

Chinese carmaker BYD Co. will buy a plant from major Japanese metal die manufacturer Ogihara Co., according to Nikkei. BYD plans to manufacture high-precision metal dies at the plant for use in mass production at its Chinese-owned factories.

Ogihara was once the target for RHJ in 2002, but it turned out that Daiwa SMBC Principal Investment acquired the 46% stake with its proposal of an IPO in 2003. But Daiwa SMBC last year sold the 36% stake to Thai Summit Autoparts Industry Co., Ltd., a major autoparts maker in Thailand.

Daiwa PI in talks with CCC to sell HMV Japan

Daiwa Securities SMBC Principal Investments is in talks with Culture Convenience Club (TSE4756), the operator of Tsutaya DVD&CD rental chain, on a sale of its portfolio company HMV Japan. Daiwa and CCC have reached a basic agreement to negotiate a sale targeted by the end of June. Price and other details are yet to be agreed upon.

Daiwa originally acquired a 100% stake in HMV Japan in 2007 as a divestment deal of the Japan subsidiary from its UK parent. HMV Japan operates 57 stores mainly in the greater Tokyo area with estimated annual sales of JPY 45 billion (USD 500 million).

CCC operates around 850 stores nationwide. CCC aims to bolster its online sales by acquiring HMV, which generates 40% of its sales from online business.

Carlyle Hands Over Kito to Finnish Crane Maker

Carlyle will sell a 22% stake in Japanese crane maker Kito to Finland's leading crane maker Konecranes for over JPY 3 billion (USD 33 million). Carlyle originally invested in Kito through a take-private MBO in 2003. Kito went public again in 2007 and Carlyle sold approximately half of its stake during the IPO process but has been carrying about a 45% stake to date.

Carlyle also intends to sell further shares by applying for Kito's buyback of its own shares which was announced at the same time.

Bank of Japan Doubles a Loan Facility

The Bank of Japan announced that it would keep interest rates at nearly-zero and double a loan facility available to other banks. "Japan's economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand," the central bank's statement said.

J-Will Partners to Sell Hotel Kinugawa Gyoen

J-WILL Partners, one of the largest independent investment funds in Japan, will sell Hotel Kinugawa Gyoen to Ooedo Onsen Monogatari according to Nikkei. J-WILL Partners originally invested in the bankrupt hotel in 2006. Hotel Kinugawa Gyoen, located in the Kinugawa Hot Spring area in Tochigi Prefecture, is a relatively large scale resort hotel which can accommodate 1300 people.

Ooedo Onsen Monogatari, known for its hot spring facilities in the Tokyo Bay area, runs more than 10 resort hotels in hot spring areas nationwide.

RHJI to Fully Exit from U-Shin

RHJ International, once one of the most active buyout funds in Japan, has further reduced its investment in Japan by selling all of its remaining stake in autoparts maker U-Shin (TSE 6985). RHJI originally acquired a 20% stake in U-Shin in 2006 with an initial plan to merge U-Shin with Niles, one of its portfolio companies. Unfortunately, the merger plan subsequently fell apart due to a disagreement within U-Shin's management.

RHJI sold its stake in music company Columbia Music Entertainment this January. RHJI still holds four Japanese companies (Asahi-Tec, Niles, Phoenix Resort, and Shaklee) in its portfolio.

Chuo Mitsui Targets Y150bn for Real Estate Fund Business

Chuo Mitsui Trust & Banking Co. plans to start a real estate fund business with the aim of building 150 billion yen in assets under management in five years, according to Nikkei. The Chuo Mitsui Trust Holdings Inc. unit has established a wholly owned subsidiary specializing in investing and managing domestic properties. Chuo Mitsui hopes to attract pension money.

Japan's economy Grows 3.8%, Less Than First Estimate

The Cabinet Office announced that gross domestic product expanded at an annual pace of 3.8% in the October-December quarter; the number was revised down from the 4.6% stated in a preliminary report last month. The GDP deflator fell a record 2.8%.

CSK May Sell Cosmo Sec. To Iwai Sec.

CSK Holdings Corp., is in talks to sell its Cosomo Securities Co. to Iwai Securities for about 16 billion yen ($178 million), according to Nikkei. The information service company is now in the process of restructuring with help from Ant Corporate Advisory Inc., the Tokyo-based investment firm. CSK focuses on core businesses like IT services and now will try to sell its non-core businesses which are represented by Cosmo Securities. If CSK succeeds in this deal, it will take a big load off its shoulders.

Sumitomo Mitsui Banking To Launch Corp Turnaround Unit

Sumitomo Mitsui Banking Corp. will establish a corporate turnaround company, which will spend up to about 30 billion yen to help the bank's midsize clients, according to Nikkei. Previously, banking groups were forbidden to own voting rights of 5% or more in a domestic company. But a legal revision in 2008 made it possible for them to own voting rights of 5% or more in unlisted firms trying to get back on their feet. The core unit of Sumitomo Mitsui Financial Group Inc. will soon set up a wholly owned corporate turnaround company with 100 million yen in capital. The subsidiary will invest in SMBC clients likely to recover in three to five years and that generate sales of 10-100 billion yen or so. The firm is expected to take a 20% or smaller stake in each. If it invests in a listed company, it will hold a stake of less than 5%.

Unison Capital Invests in MK Capital

Unison Capital has announced that it will acquire a 61.3% stake in MK Capital Management (TSE Mothers 2478), a real estate related finance and asset management company, through a private placement of new shares for JPY 2.5 billion (USD 27.7 million). MK will maintain its listing status.

Tokio Marine Capital Acquires Bushu Pharmaceuticals

Tokio Marine Capital has announced that it will acquire a 100% stake in Bushu Pharmaceuticals, a provider of drug manufacturing services, from Shionogi Pharmaceuticals (TSE4507). Bushu, the second largest CMO (Contract Manufacturing Organizaion) in Japan, recorded an annual operating profit of JPY 1.09 billion (USD 12.1 million) and annual sales of JPY 9.3 billion (USD 103 million) for the March 2009 period. No other financial terms were disclosed.

J-Will Partners to sell nursing home operator Bon Sejour

J-Will Partners will sell its 100% stake in Bon Sejour, a Tokyo-based nursing home operator, to Benesse (TSE9783), a provider of educational services. Bon Sejour operates 22 nursing homes mainly in the Tokyo and Osaka metropolitan area. Benesse operates 150 nursing homes through its subsidiary. No financial terms were disclosed. J-Will originally acquired Bon Sejour from real estate company ZECS (TSE8913) in 2008.

Ant Capital sells Honma Golf to a Chinese Company

Golf club maker Honma Golf Co. will go under the umbrella of Marion Holdings Ltd., a holding company backed by Chinese firms, according to Nikkei. Ant Capital Partners Co. and Milestone Turnaround Management will by the end of March sell more than 50% of Homma's shares to Marion, which counts among its shareholders investment firm Crest Group Co.. The Chinese golf market is expected to grow as the country's economy develops. Honma will seek to expand through its ties with Marlion's shareholders. Honma filed for bankruptcy protection in 2005 and completed court-led rehabilitation proceedings the following year. Chinese companies are showing an increasing appetite for Japanese investment. Retail giant Suning Appliance Co. bought Tokyo-based elecronics retailer Laox Co. last August.

30 Financial Institutions Holds Willcom Claims

As reported, PHS (personal handyphone system) service provider Willcom, which filed for bankruptcy protection with the Tokyo District Court on Thursday, aims to rebuild itself with help from the Enterprise Turnaround Initiative Corp. of Japan. A total of 30 financial institutions hold a combined 99.5 billion yen in unsecured claims such as loans to Willcom., with the four largest lenders accounting for nearly 70% of the total. Mitsubishi UFJ Financial Group Inc., a unit of the Bank of Tokyo-Mitsubishi UFJ, holds the largest amount at 23.6 billion yen. Mizuho Financial Group Inc., Norinchukin Bank and Mitsubuishi UFJ Trust and Banking Corp. each hold claims topping 10 billion yen. They will be asked to grant waivers for as much as 80%.

Sekisui House Breaks Into REITs Market

Japan's leading homebuilder Sekisui House will acquire a mid-sized real estate investment trust company to enter into the REIT sector, according to Nikkei. Sekisui House will buy a 75% interest in Joint Capital Partners Co., the operator of Joint Reit Investment Corp., for an estimated several billion yen. Spring Investment Co., the Japanese arm of an Australian real estate investment fund, will also take a stake. Joint Reit Investment has more than 100 billion yen in total assets. Its former parent, real estate developer Joint Corp., went bankrupt last May. Sekisui House aims to increase the unit's assets to around 200 billion yen, using its holdings of rental properties. This merger is likely to stimulate the long-depressed REIT market.

Willcom To File For Bankruptcy Under Prepackaged Deal

Willcom Inc., the beleaguered PHS (personal hanyphone system) service provider, will file for bankruptcy protection with the Tokyo District Court on Thursday, initiating a pre-negotiated rebuilding processes that will tap taxpayer money, according to Nikkei. Willcom's rehabilitation efforts will be sponsored by Softbank Corp., one of the big three carriers and investment fund Advantage Partners LLP. The government-backed Enterprise Turnaround Initiative Corp. of Japan, or ETIC is expected to officially declare its support for Willcom as early as next week, making the PHS service provider the second firm to receive its help, after Japan Airlines Corp.

Japan 4Q GDP grows at 4.6% annual pace

The government announced Monday that real gross product grew at an annual pace of 4.6% in the October-December period. The average forecast was around 3.4%. The figure corresponds to quarterly growth of 1.1% while it was zero growth in the July-September period. While exports, aided by a global recovery, led the expansion that supported manufacturers, the increase of consumer spending may not last as the effect of the stimulus fades.

Shinsei, Aozora Call Off Merger

Shinsei Bank and Aozora Bank have decided not to merge in October as planned after failing to come together on a business strategy, according to Nikkei. The merger will either be abandoned or postponed indefinitely. Both sides will craft plans for strengthening operations on their own before announcing the deal's collapse. Shinsei wants to expand its retail operations, including nonbanking financing, while Aozora is more keen on working with regional banks.

Sumitomo Corp Prepares Tender Offer For J-Com

Sumitomo Corp. is preparing to launch a tender offer for a bigger equity stake in Jupiter Telecommunication Co., or JCOM, according to Nikkei. The trading house holds a 27.7% stake in JCOM as the second-largest shareholder behind the U.S. company Liberty Global Inc. KDDI announced last month that it intends to buy a large portion of Liberty's 37.8% interest in the cable company. KDDI's surprise bid for a major stake in JCOM upset Sumitomo's firm intention of beefing up its media business throough JCOM.

Kirin, Suntory breaks off merger talks (2)

News release from Suntory:
Though Suntory Holdings Limited had been in discussion with Kirin Holdings Company, Limited toward integration of businesses, Suntory hereby announces that Suntory has terminated our negotiation with Kirin. Suntory decided on terminating the negotiation because while Suntory has studied what the integrated new company should be, Suntory acknowledged a discrepancy of understandings between the two companies including the integration ratio and considered it difficult to realize the desired new integrated company Suntory is seeking.

Kirin, Suntory breaks off merger talks

Kirin Holdings Company, Limited (Kirin), which has been in merger negotiations with Suntory Holdings Limited (Suntory), today announced that the negotiations have been terminated. Kirin had been negotiating on the premise that the new entity would be managed as a listed company in order to ensure appropriate management independence and transparency. However, it became apparent that Suntory held a different view on this matter, and Kirin determined that even if negotiations were to continue, they were unlikely to result in the establishment of a company that would fulfill Kirin's aim of developing as a leading global company and earn the understanding and approval of Kirin's domestic and overseas customers, employees, shareholders and other stakeholders. Kirin therefore resolved to terminate the negotiations.

Overseas Demand Boosts Earnings Recovery in Oct-Dec Quarter

Buoyed by strong demand in overseas markets, earnings at listed companies are bouncing back, with firms that derive the bulk of their sales abroad leading the pack. Companies relying on foreign markets for 50% or more of their sales saw their combined pretax profit skyrocket 450% on the year in the October-December quarter, according to calculations by The Nikkei. Firms with 30-50% of sales generated abroad logged a smaller but still strong gain of 140%.

18 Brokerages Had Better Oct-Dec Qtr On Net Basis In 09

Eighteen of 20 major and midsize brokerages reported year-on-year improvement in net loss or profit figures for the October-December quarter of 2009, according to Nikkei. A recovery in investment trust sales and a sharp pickup in underwriting fees from listed companies' public offerings contributed. But because of a slowdown in revenue from stock-trading commissions, a full-fledged earnings recovery by the brokerages could take more time.

FSA Investigates KDDI for its Plan To Buy JCOM Shares

The Financial Services Agency is looking into KDDI's plan to acquire a stake in Jupitar Telecommunication Co. to determine whether the deal falls under a market rule mandating a tender offer, according to Nikkei. KDDI said on Jan. 25 that it will take a stake in Japan's cable television company, known as JCOM, in mid-February. The plan call for obtaining a 37.8% interest by acquiring three firms under the umbrella of US media firm Liberty Global Inc. that each own JCOM shares. The FSA is looking at whether the deal falls under a Financial Instruments and Exchange Law provision requiring a company to conduct a tender offer when buying more than a third of the voting rights in another firm outside of the stock market. At first glance, KDDI's proposed move appears to raise no legal issues because it is not acquiring the stake directly. But some have pointed out that the telecom giant is effectively acquiring a stake exceeding one-third of the voting rights through an off-market transaction. The FSA will interview those involved in the deal to determine if it will compromise the interests of ordinary investors.

Citigroup Ready To Bolster Japan Ops.

Citigroup Inc. will reinvigorate its commercial banking operations in Japan by opening four new locations this year, according to a Nikkei interview with CEO Vikram Pandit. After incurring massive losses in the global financial crisis, the US financial giant scaled back its presence in Japan by unloading Nikko Cordial Securities Inc. and shrinking its consumer finance operations. Calling Japan the center of the rapidly growing Asian economy, Pandit said that Citi will bolster its commercial banking operations here, under which it currently runs 31 local branches.

Shinsei, Aozora Bank Mulling Delaying Planned Merger-Report

Shinsei Bank Ltd. and Aozora Bank are considering their merger - currently planned for October - after hitting a snag over which bank system to adopt, according to the weekendMainichi Shinbun. The paper said the Financial Service Agency is inspecting the banks financial affairs, and based on the results of the inspection, the two banks plan to make a final decision by the end of March.

RHJ International Makes Partial Exit from U-Shin

U-Shin Ltd., announced that US investment fund RHJ International has sold a voting stake of 3% in the listed auto-parts maker. The US investment firm acquired about 20% in 2006. In addition to the sale of its ownership interest in U-Shin, RHJ International agreed to sell its 25.5% interest in Columbia Music Entertainment last week.

Wilcom Moves towards Pre-packaged Bankruptcy

Willcom Inc. is moving toward rebuilding under court protection in order to make its process transparent and pave the way for receiving public funds, according to Nikkei. The troubled PHS service provider is counting on the assistance of the Enterprise Turnaround Initiative Corp. of Japan, or ETIC, a government-backed entity that helps businesses in dire straits get back on their feet. With transparency a high priority for the ETIC, Willcom likely concluded that bankruptcy proceedings under court supervision would better satisfy the turnaround body's requirement than a voluntary debt workout would.

Bain To Buy Domino's Japanese Franchisee

Bain Capital, a US private equity firm, announced that it would acquire Japanese firm Higa Industries Co., the Japan franchisee of Domino's Pizza. Bain will buy the company from Duskin Co., Daiwa SMBC Capital and Ernest Higa, the founder of Higa Industries. The transaction is Bain's second in Japan in about 2 months. The PE firm purchased Bellsystem24, a Japanese telemarketer, for $1 billion from Citigroup Inc. Higa operates 179 franchised Domino's Pizza stores in Japan. Bain owns a minority stake in Domino's Pizza in the United States. Bain bought a stake in Domino in 1988 and Domino went public in 2004.

Kirin, Suntory likely To Reach Merger Pact In or After Feb

Kirin Holdings Co. Ltd. and Suntory Holding Ltd. will likely to reach a merger accord during or after Februrary, according to Nikkei. In a move to create a formidable competitor to the world's leading brewer, Anheuser-Busch Inbev. N.V., Kirin and Suntory are proceeding with merger talks. But Japanese media have reported that a rift has developed between Kirin and Suntory on the merger ratio, the key point in moving forward with plans to integrate their businesses.

RHJI sells Columbia Music to Faith

Mobile phone content provider, Faith Inc. announced that it will become Columbia Music Entertainment Inc.'s largest shareholder by taking a 31.39% stake. Faith plans to turn Columbia Music into an equity-method affiliate by spending about 2.7 billion yen to buy stock from current shareholders, including investment firm RHJ International SA, who invested in 2001.

H.I.S. Likely To Support Huis Ten Bosch's Rehabilitation

Travel agency H.I.S. Co. is considering taking part in supporting the turnaround of Huis Ten Bosch., an ailing theme park operator in Nagasaki Prefecture, according to Nikkei. Under a likely plan, Huis Ten Bosch would reduce its capital and issue new shares through a third-party allocation. H.I.S. would take a more than 50% stake with an investment of some 2 billion yen, and three to four local companies would collectively spend a little less than 1 billion yen to buy shares. Huis Ten Bosch filed for bankruptcy protection under the Corporate Rehabilitation Law in 2003, after continuously incurring operating losses since opening the theme park in 1992. Nomura Holding Inc., the parent company since 2003, wishes to discontinue its involvement and is seeking a company to support Huis Ten Bosch's reconstruction.

Corp Bankruptcies Fall 1st Time In 4yrs In 2009

The number of companies entering bankruptcy with debts of at least 10 million yen edged down 1% to 15,480 in 2009, marking the first decline in four years, according to the major credit reporting agency, Tokyo Shoko Reserch, LTD. The reasons for the decline was emergency guarantee programs and public works projects. The number of bankruptcies in December fell 16.5% year on year to 1,136, marking the fifth straight month of decline.

Willcom in Talks with Govt Turnaround Body

Willcom Inc., the leading PHS (Personal Handyphone System) service provider, is in the final stage of talks to reorganize under The Enterprise Turnaround Initiative Corp. of Japan (ETIC) according to the Nikkei. ETIC is expected to take an equity stake in the mobile carrier, as are Softbank Corp., Japan's third-largest cellular phone carrier, and Advantage Partners, a Japanese private equity firm. Willcom, owning a total of 93.5 billion yen to about 30 financial institutions, is in private negotiations with creditors, asking for debt forgiveness. Willcom, once it recovered from support of the US investment firm Carlyle Group (a major shareholder), has been losing its customer base because of fierce competition in the mobile phone market.

Foreign Net Buyers Of Japan Stocks In 2009

Overseas investors were net buyers of Japanese stocks to the tune of 28.3 billion yen in 2009, becoming net buyers for the first time in two years, according to Nikkei. Although the financial crisis prompted foreign institutional investors to cash out profits early last year, buying outweighed selling from April, the start of the Japanese fiscal year. December saw the largest amount of net purchases, fueled by a pause in the yen's appreciation against the dollar and the Bank of Japan's accommodative monetary policy.

Venture Capital Investment Down By Half In 2009

Investment by venture capital companies fell to 37.8 billion yen or 472 cases, in 2009, according to the Japan Venture Capital Association. VC companies invested about 100 billion yen in 2008 and 193.3 billion yen in 2007. The firms struggled to recoup their investments and held down spending as initial public offerings declined and a number of start-ups they invested in went belly up amid an economic downturn.

JAL Shares Tumble On Delisting Concerns

Shares in Japan Airlines Corp. were ask-only Tuesday morning on worries that the carrier will be delisted. It was reported last weekend that JAL will file for bankruptcy protection as early as January 19 to press ahead with restructuring with support from the Enterprise Turnaround Initiative Corp. of Japan (ETIC). JAL and ETIC have decided to limit a possible alliance with either one of the two interested US carriers, Delta and American, to a business tie-up rather than a partnership that includes equity ownership, according to Nikkei.

New Finance Minister Kan Says Weaker Yen Preferable

Japan's new Finance Minister Naoto Kan said Thursday he is hoping that the yen will weaken from the current level to help the economy recover. He also said that many Japanese companies think it would be ideal for the Japanese currency to be around 95 yen to the US dollar. It is rare for a Cabinet member to make comments on foreign-exchange levels. Shortly after Kan's remarks, the dollar jumped more than a half a yen to reach the day's high in the upper 92 yen range. Deputy prime minister Kan replaced Hirohisa Fujii whose resignation for health reasons was officially approved by the government Thursday.

Dentsu To Acquire 40% Stake In Major Chinese Ad Agency

Dentsu Inc. will take a roughly 40% interest in Suntrend Advertising Co., a Chinese marketer with a presence in more than 500 cities in the country, according to Nikkei. Under their basic agreement, Japan's largest advertising agency will buy Suntrend shares form existing shareholders in the first half of the year for an estimated 5 billion yen, becoming the company's largest stakeholder. Suntrend employs roughly 30,000 workers involved in marketing activities such as distributing samples at stores. Some 20-30 multinational corporations are among its clients including Nike Inc. and PepsiCo Inc. In China, advertisers tend to place more weight on sales promotions at stores than on television commercials because of the nation's large income disparity. With Dentsu's strength in TV commercials, the two partners intend to combine media-based advertising with in-store sales promotions.

SMFG Likely To Issue Y800bn In Common Shares

Sumitomo Mitsui Financial Group Inc. plans to issue 800 billion yen in common shares this month and unwind at least 500 billion yen in cross-sharing to shore up its balance sheet, according to Nikkei. The issuance of common shares would be SMFG's second since last summer, aiming at preparing for stricter capital requirements as well as at securing funds for growth areas such as investment banking and Asian and other overseas operations.

Orix To Invest Y300bn In Chinese Start-Ups

Orix Corp. plan to invest 300 billion yen in promising Chinese firms in such fields as finance and infrastructure over the next 3 years to tap rapid economic growth in that country, according to Nikkei. Orix will set up a holding company in Dalian this month that will oversee its investment operations in China. The wholly owned company, to be capitalized at roughly 8 billion yen, will procure yuan funds locally and try to reap profits by taking companies public. As its first deal, the investment firm will take a roughly 15% stake in a Dalian-based firm specializing in tourism and real estate. By February, the investment firm will buy stakes in leasing firms.

Asahi Brewery, Carlsberg Form Sales Alliance

Asahi Breweries Ltd. will use the marketing network of Danish brewery Carlsberg A/S to sell its beer in Hong Kong as the first step of an alliance that the two firms are considering broadening to include other markets, according to Nikkei. The move comes amid plans by another Japanese brewery, Suntory Holding Ltd., to collaborate with major foreign player PepsiCo Inc. to promote its sales in China. Carlsberg's Hong Kong subsidiary, which has strong ties with local Western restaurants, convenience stores and supermarkets, will begin selling Asahi's flagship Asahi Super Dry beer, the No1 selling brew in Japan later this month.