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Japan's DaVinci Fails in Hostile Bid for TOC

Real estate fund KK DaVinci Advisors said on Tuesday it failed in a 103 billion yen (US$850 million) bid for building leasing firm TOC, underscoring the difficulty facing hostile takeovers in Japan.

The bid, in which DaVinci offered a 64% premium for TOC's shares, had been predicted by some market participants to become Japan's first successful hostile takeover of a publicly traded firm.

DaVinci, which manages Japan's biggest real estate fund, worth about 1.2 trillion yen, owns a 10% stake in TOC and was aiming to buy up to another 58% or 79 million shares. It was thwarted after TOC's founding family bought more shares in the company.

Some 47.35 million shares were tendered although none will be bought as DaVinci did not meet its minimum target. DaVinci spokesman Hiroki Nakajima said the company had no plans to launch another bid for TOC at a higher price. Instead it was focused on talking to TOC to raise its corporate value.

DaVinci launched its tender offer in May without the backing of TOC's management.

TOC, which owns dozens of buildings in Tokyo and leases them out to retail and wholesale companies, opposed DaVinci in part because it was worried DaVinci might sell its landmark buildings in Tokyo. DaVinci later raised the bid price.