Hillhouse Completes Tender in Push for $1.1B Buyout of Japan’s Samty

Hillhouse Investment Management and its Rava Partners real estate unit announced on Tuesday that they have completed a tender offer which paves the way for the privatisation of Tokyo-listed Samty Holdings in a deal which values the Japanese real estate developer and manager at JPY 169 billion ($1.13 billion).

Hillhouse and Rava have achieved the milestone through a tender launched two months ago which offered shareholders JPY 3,300 per share in Osaka-based Samty with that proposal having been supported by Samty’s board of directors and by its largest shareholder, Daiwa Securities Group Inc, as well as by that company’s Daiwa PI Partners affiliate,

The tender, which went into effect on 15 October, concluded on 26 November with approximately 50.04 percent of Samty Holdings’ shares having been tendered on a fully diluted basis. This exceeded the 29.48 percent minimum acceptance level required for the bid to proceed, Hillhouse said in the release.

With the takeover bid (TOB) completed, Hillhouse and its partners aim to transform Samty into a property investment platform as the Japan market continues to command greater attention from international investors.

“We are thrilled to support the continued growth of an industry leader, transforming the developer model into integrated asset manager model with diversified and recurring income streams,” said Hillhouse partner and co-head of Rava Partners Joe Gagnon. “This will feature boosting the company’s asset management business by tapping into our global investor network, while improving Samty Holdings capital efficiency by establishing a series of development funds.”

Broad Acceptance

With the tendered shares having been accepted for payment in accordance with the terms of the offer, the private equity firm says it now intends to complete a squeeze-out process to delist Samty Holdings through a special resolution at an extraordinary general meeting to be held at an unspecified future date. The buyout transaction remains subject to customary closing conditions.

Following completion of the squeeze-out of remaining shareholders, Samty Holdings will become a privately held company with current chief executive Yasuhiro Ogawa staying on to lead the firm.

Hillouse and Rava characterised the “take-private” as part of a strategy to achieve sustainable long-term growth by transforming Samty’s current capital gains-focused business model into one focused on sustainable income through mergers and acquisitions which would enhance and streamline the company’s operations.

“As a private company, I look forward to guiding the company as we strengthen our leadership position and transform into a regional accommodation asset manager with a fully integrated business model, the first of its kind in Japan,” Ogawa said. “Samty Holdings will benefit from Hillhouse’s extensive experience as well as the stability that comes from their long-term approach.”

Daiwa Stays On

Daiwa Securities, which together with Daiwa PI Partners owned 37.18 percent of Samty before the take-private tender, will continue to be a shareholder while working together with Hillhouse to  support the growth of Samty Holdings, according to the statement.

“We welcome the completion of this TOB and believe that Hillhouse’s extensive knowledge will greatly contribute to the transformation of Samty Holdings’ business model,” said Akihiko Ogino, president and chief executive of Daiwa Securities Group.

Ogino added that, “This is a significant transaction for us that aligns closely with our asset management strategy, and we look forward to working with Hillhouse after the privatization to support the transition of Samty Holdings to a stable growth stage through the expansion of its fund management business.”