As a shareholder in Takefuji Corp. (8564/JP or TAKAF/OTC), this Bloomberg report makes very interesting reading:
Yasuo Takei, the founder of Takefuji
Corp., made billions lending to Japanese consumers until he died
last month. Now investors may reap a fortune from his company,
and others like it, as predators start to circle. Speculation about takeovers by investment firms such as
Goldman Sachs Group Inc. and Newbridge Capital Ltd. is helping
revive shares of Takei's Takefuji, Aiful Corp. and other lenders.
More:
Japan's consumer finance houses have become attractive targets because the declines have brought most share prices below the companies' net worth. They're sitting on loan books fat with high-interest credits at a time when consumer demand is driving expansion in the world's second-biggest economy. Once lawmakers set a new limit on consumer interest rates, the billionaire founding families may be unable to ward off suitors.
"Some overseas funds may have already started buying up shares,'' said Toru Komatsu, chief executive of Komatsu Portfolio Advisers Co., which advises fund managers in Europe and the U.S. and wealthy individuals in Japan. "Banks may move after that's decided,'' he said of the rate limits.
Shares of Kyoto-based Aiful, the largest Japanese consumer lender by sales, have slumped 48 percent this year, leaving the company with a market value of 726 billion yen ($6.2 billion.) The drop is the second-largest in a Topix index of 36 finance companies after a 53 percent decline in Credia Co., another consumer financier. Acom Co., the No. 2 lender, lost 30 percent and Promise Co., the third-biggest, dropped 31 percent. Takefuji, the fourth-largest, slid 21 percent.
This further down:
Takei's death Aug. 10 at the age of 76 prompted speculation that Takefuji may be sold.
The company has attracted overseas bidders in the past. Goldman, the second-biggest U.S. securities firm by market value, and Newbridge, an investment arm of Fort Worth, Texas-based buyout firm Texas Pacific Group, were rebuffed by him two years ago. They had sought to buy shares his family had to sell after a court ordered reduction of the family's holding to less than 25 percent. Spokeswomen for Takefuji, Goldman and Newbridge declined to comment on speculation about bids for Takefuji.
Canadian financier Peter Cundill in June increased his holding in Takefuji for the second time this year, regulatory filings showed. The purchases raised investor speculation that local banks and overseas funds may seek to acquire Japanese consumer lenders. Cundill didn't return calls for comment.
Takefuji and the other players in the sector have always been controlled by founding families. But the article ends with one observer saying the game has changed:
"The only way these lenders can survive is by merging to cut costs or becoming bank affiliates,'' said Koei Takahashi, an analyst at Nomura Holdings Inc. "The founding families have resisted takeovers, but things are different now.''
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