Tokyo Star Bank Ltd, owned by US buyout fund Lone Star Funds, posted a record gain after Reuters reported Advantage Partners is close to gaining regulatory approval to acquire the company.
The shares rose by the daily limit of ?40,000 (US$352), or 14 percent, to ?Y334,000 at the 3pm close in Tokyo, the biggest gain since their debut in October 2005. The takeover price was said to be close to ?410,000 a share, which would value the deal at about US$2.5 billion, said the report, which cited people familiar with the matter.
Private equity firm Advantage is set to acquire 68 percent of Tokyo Star from Dallas-based Lone Star and buy out minority investors through a tender offer, eventually taking the Japanese bank private, Reuters said.
"If the transaction goes through at ?410,000, it should be a pretty good deal for Lone Star and it's only natural for investors to buy up the stock toward the price," said Shinichi Tamura, a banking analyst at UBS Securities Japan Ltd in Tokyo.
Following the Reuters report, Tokyo Star said it was not in a position to comment on a specific investor's acts in a statement released through the Tokyo Stock Exchange on Friday.
Advantage Partners, Japan's largest buyout fund, was founded in Tokyo in 1992 by former Bain & Co executives Taisuke Sasanuma and Richard Folsom. The company raised ?2.95 billion in 1997 for Japan's first buyout fund and has since established two more funds. It has invested in 23 Japanese companies, its Web site said.
Lone Star, the buyout firm founded by John Grayken, acquired then-bankrupt Tokyo Sowa Bank in 2001 for ?40.3 billion, renaming it Tokyo Star. An initial public offering in October 2005 raised ?86.6 billion.
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