Japanese travel agency H.I.S. has announced plans to purchase up to 40 per cent of real estate developer Unizo’s shares for as much as 42.7 billion yen (US$394 million), in a bid to expand hotel operations, Nikkei reported.
The travel group is offering 3,100 yen a share, about 30 per cent above Unizo’s closing price last Wednesday. The offer will be open until August 23.
H.I.S. said it requested a meeting with Unizo several times between December and April to discuss potential capital and business partnerships.
Nikkei further understands that Unizo did not respond, prompting H.I.S. to acquire its current 4.79 per cent stake in the company. It is already the leading shareholder in Unizo.
In a statement released on Wednesday, Unizo said the tender offer was announced “unilaterally and abruptly”.
While H.I.S. currently earns about 60 per cent of group operating profit from the travel business, its margins are low given the small commissions on hotel and plane bookings.
Travel agencies are also facing mounting OTA competition. JTB, another Japanese brick-and-mortar player, recorded a 15.1 billion yen net loss for the fiscal year ended in March, according to Nikkei.
H.I.S. now operates 33 hotels in Japan and abroad, and is aiming to eventually hit the 100 mark.
Unizo currently owns 25 business hotels across Japan.
