Hulic Makes $1.2B Bid to Take Over Japanese Builder From Hong Kong’s Oasis

Japanese real estate giant Hulic has launched a takeover bid for Raysum, a Tokyo-listed builder controlled by Hong Kong fund manager Oasis Management, at a total acquisition cost of JPY 173.5 billion ($1.2 billion).

Hulic on Friday announced a tender offer for the 36.12 percent of outstanding shares not held by Oasis at JPY 61 billion, or JPY 5,913 a share. If the offer is accepted, Hulic intends to buy out Oasis, led by founder and chief investment officer Seth Fischer, in a separate transaction, according to a stock filing.

Oasis acquired its controlling stake in November 2022 from Raysum founder Takeshi Tanaka for JPY 1,700 a share, with the activist investor pledging at the time to work with management to maximise Raysum’s corporate value. A successful exit would put Oasis in line to more than triple its initial bet made less than two years ago.

Hulic, meanwhile, said it was attracted to Raysum’s value-add know-how and decision-making speed.

“Regarding the real estate business environment, the tender offeror considers that the investment market for income properties is expected to remain generally firm despite the Bank of Japan’s move toward monetary policy normalisation as there is no immediate concern about a rapid tightening,” Hulic said in the filing.

Juicy Premium

Hulic’s offer represents a 94 percent premium to Raysum’s last trading price of JPY 3,045 before the Friday afternoon announcement (Japan markets were closed Monday for a national holiday). The offer period opens Tuesday and closes on 30 October.

Hong Kong-based Oasis invests globally across various strategies with a focus on Asia. The firm made headlines last year when it sued Kaisa Group Holdings to recover $102.3 million in unpaid principal and interest from the defaulted Chinese developer.

In 2021, Oasis acquired from Deutsche Bank a 20 percent stake in Shenzhen developer Nam Tai Property that had previously been held by Kaisa, according to the Financial Times. The German lender had seized the shares from Kaisa after the latter’s default on a loan, with the intervention forming part of a complex battle for control of Nam Tai involving New York-based IsZo Capital Management and US billionaire Peter Kellogg.

Oasis bought its Raysum stake from Tanaka at a near-peak share price after the Japanese executive had stepped down from the board in late 2021 for health reasons and scrapped his original idea to transfer his entire interest to a foundation, according to Smartkarma analyst Travis Lundy.

In announcing its 2022 tender offer, Oasis said that it considered the Japanese real estate market undervalued and that it could expand Raysum’s customer base by marketing to foreign investors. It also sought to open overseas sales channels for Raypower, a Raysum unit that makes emergency gas-powered generators.

Raysum posted a profit of JPY 21.9 billion for the 12 months ending 30 March on sales of JPY 94.3 billion, up 74 percent and 38 percent respectively from levels two years earlier, with net assets totalling JPY 22.5 billion. Oasis had not responded to Mingtiandi’s request for comment by the time of publication.

Tie-Up With KKR

Hulic’s takeover bid follows a Bloomberg report last month that the Japanese builder had teamed up with US buyout giant KKR to offer $2 billion for a Tokyo skyscraper owned by GIC.

The Singapore sovereign fund began marketing the Shiodome City Center last year after developing the 43-storey tower in 2003 with Mitsui Fudosan. The building is home to the headquarters of All Nippon Airways and tech giant Fujitsu, Bloomberg said.

Also last year, Hulic entered a partnership with Singapore-based Digital Edge to develop a carrier-neutral data centre on the site of a demolished office block in downtown Tokyo.