Japan’s Open House to Take Over Builder Pressance With $390M Stake Buy

Tokyo-listed residential developer Open House Group has made a tender offer to acquire the 36.58 percent of shares it does not already own in Osaka-based builder Pressance Corp for JPY 60.7 billion ($390 million).

A cash consideration is to be paid by Open House, led by billionaire founder Masaaki Arai, in the amount of JPY 2,390 per share, according to a Friday stock filing. Pressance’s TSE-listed shares were flat at JPY 1,957 each at the close of trading on Monday.

In its own statement Friday, Pressance expressed its board’s unanimous support for the tender offer, which closes on 26 February. Once the process is completed, Pressance will become a wholly owned unit of Open House, which builds single-family homes and condos in Tokyo, Nagoya, Fukuoka and the Kansai region.

“While the target company is a consolidated subsidiary of the tender offeror today, as the target company is a listed company, a potential conflict of interest structure exists between the tender offeror and the minority shareholders of the target company,” Open House said. “However, the tender offeror believes that the transaction will eliminate such conflict of interest structure and enable collaboration within the tender offeror group to maximise profits.”

Urban Home Specialists

Founded in 1997, Open House went public in 2013 and has sold more than 60,000 homes in Greater Tokyo.

For the fiscal year to the end of September 2024, the developer booked sales of JPY 1.3 trillion ($8.3 billion), up 12.8 percent, and reported an attributable net profit of JPY 92.9 billion, up 0.9 percent.

The Pressance unit, which focuses on investment condos and condos for families in prime locations of the Kinki and Tokai-Chukyo regions, recorded sales of JPY 180.9 billion, up 12.1 percent, for an operating profit of JPY 27.5 billion, up 6.5 percent.

Open House plans to finance the Pressance buyout with a JPY 60.7 billion loan from Sumitomo Mitsui Banking Corp.

Consolidation Nation

The latest consolidation of Japanese builders follows real estate giant Hulic’s JPY 173.5 billion ($1.2 billion) acquisition of Raysum two months ago.

Hulic acquired the tendered shares of Raysum and bought out controlling shareholder Oasis Management, led by founder and chief investment officer Seth Fischer, with Raysum becoming a consolidated subsidiary of Hulic on 7 November.

In a September announcement, Hulic said it was attracted to the value-add know-how and decision-making speed of Raysum, which 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.