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With ¥723 billion in Japan real estate already, Bain ramps up property deals
With ¥723 billion in Japan real estate already, Bain ramps up property deals

Japan Times

time10-06-2025

  • Business
  • Japan Times

With ¥723 billion in Japan real estate already, Bain ramps up property deals

Bain Capital is bolstering its property investments in Japan with a pipeline of deals, after taking over Seven & I Holdings' supermarkets and amassing more than ¥723.5 billion ($5 billion) of real estate assets in the country. The investment firm has about five deals under discussion that leverage a strategy to unlock value from real estate assets held by Japanese companies, said Man Kinoshita, a partner in the special situations team. Property is becoming a key feature of the booming private equity landscape in Japan, as global investment firms look to scoop up undervalued assets. Many Japanese companies have significant real estate holdings that are undermanaged or a drag on the main business, Kinoshita said in an interview. In some cases, the property requires sizable capital for a revamp, he added. Bain is seeking to either buy a company that has such attractive assets or purchase real estate units that some Japanese firms are looking to offload, Kinoshita said. It's willing to work with companies on this strategy by providing both capital and operational support, he said. The investment firm applies a hybrid model of private equity and real estate investments in Japan. "We do not intend to employ any predatory approach of buying companies just to strip out their real estate assets,' Kinoshita said. The executive joined the firm in 2023 after spending years at Goldman Sachs Group, with roles including Japan head of the asset management division. Property assets were one reason why Bain made a bid for Fuji Soft a few months back, in a rare tussle with rival private equity giant KKR & Co. The latter ultimately won control of the Japan tech firm. Bain is also keen to back platform companies that run logistics, data centers or health care operations in Japan. For financing, Bain is interested in offering credit or capital solutions that involve large mezzanine or preferred equity funding. Currently only a few investors are playing this role in Japan, where an increasing number of companies are expected to have capital needs that traditional financial firms can't provide, according to Kinoshita. "The current volatile market implies more companies will need such types of capital,' he said. "This area is quite unique once it becomes a sizable transaction.' Bain is looking to raise billions of dollars for its next Asia fund and a special situation fund in the region, as it moves to back private equity and credit deals in countries from Japan to India. Earlier this year, Bain agreed to take a 60% stake in York Holdings, which consists of the supermarket and other retail businesses of convenience store operator Seven & I, for $5.37 billion. Bain has said it intends to pursue further deals to grow the supermarket chain, while seeking to take it public in three years. It is bolstering the business by both enhancing operational efficiency and helping it manage its real estate better, Kinoshita said. Bain is working to improve the tenant profile of Ito-Yokado supermarkets, while considering whether to expand the number of York-Benimaru outlets, he added. To enable its ambitions, Bain will hire more people who specialize in both investment and asset management, Kinoshita said. There are seven people in his special situations team in Japan.

Seven & I and Couche-Tard sign nondisclosure agreement
Seven & I and Couche-Tard sign nondisclosure agreement

Japan Times

time01-05-2025

  • Business
  • Japan Times

Seven & I and Couche-Tard sign nondisclosure agreement

Seven & I Holdings and Canada's Alimentation Couche-Tard said Thursday they have signed a nondisclosure agreement, in a move that might signal discussion on the latter's takeover proposal is moving forward. In a statement issued on Thursday, Seven & I said the agreement would facilitate information sharing between the two companies, in addition to the information already provided to potential divestiture package buyers. Paul Yonamine, who chairs an independent special committee that is reviewing Couche-Tard's proposal, said Seven & I will work with the Canadian bidder to explore the possibility of a deal while simultaneously building on its standalone plan to achieve growth. 'We caution that it remains the case that it is critical for the (special committee) to assess if there is a path to a viable divestiture by identifying potential buyers and determining their ability to stand up a real, stand-alone business that will preserve competition and satisfy regulators. That work is ongoing,' Yonamine said in the statement. Couche-Tard also noted in a Thursday release, 'There can be no assurance that these discussions will result in a transaction,' adding that the agreement will allow the two parties to 'progress transaction discussions, facilitate due diligence, and collaborate on plans to engage with regulators.' Shares in Seven & I rebounded by 3.4% in Tokyo trading after the market opened on Thursday. Seven & I had cited antitrust issues as a key hurdle to any talks with Couche-Tard and hadn't agreed to sign a nondisclosure agreement until now. It has also actively attempted to avert the takeover since Couche-Tard announced its plan to purchase Japan's largest convenience store chain operator last August. Moves Seven & I has done so far include a massive management buyout proposal that later fell apart, as well as bringing a veteran American executive on as its new CEO . After the company's founding family withdrew from the buyout proposal earlier this year, Seven & I unveiled in March one of the largest buyback plans ever in Japan that would see it purchase ¥2 trillion ($13.9 billion today) in shares through 2030, including a maximum of ¥600 billion in the fiscal year ending in March 2026. To finance the buyback, the company said it would sell its noncore grocery retail businesses to Bain Capital while taking its North American subsidiary public by the second half of 2026.

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