Japan Tobacco, instant noodle maker Nissin Food Products and frozen food maker Katokichi announced Thursday a deal under which Japan Tobacco and Nissin will purchase the frozen food producer.
As a first step Japan Tobacco, better known as "JT," will acquire all outstanding shares it does not own in Katokichi on the open market.
JT will offer 710 yen per share for the company, a 34.7 percent premium over the average Katokichi closing price over the past month.
It aims to buy a minimum of 99.777 million shares and up to 153.789 million shares during the bid period between November 28 and December 26, bringing the maximum acquisition cost to 109.19 billion yen.
Japan Tobacco currently holds 5.09 percent of voting rights in the frozen food maker.
Under the next phase of the consolidation process, Japan Tobacco will sell a 49 percent stake of Katokichi to Nissin by the end of March 2008.
Japan Tobacco and Nissin will then spin off their frozen food segments and combine them with Katokichi in order to bolster their frozen food operations.
Katokichi was hit by a scandal earlier this year when improper accounting practices were revealed, while its subsidiary was later found to have used mislabeled ground beef from a processed meat supplier.