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Business deals

Japan's Nitori wins over Shimachu with $2bn takeover bid

Furniture retailer drops support for rival tender offer underway from DCM

Nitori is expected to launch a friendly offer on Shimachu as early as mid-November. (Photos by Makoto Okada and Taro Saeki)

TOKYO -- Japanese furniture retailer Shimachu has decided to accept a roughly 210 billion yen ($2 billion) takeover offer from industry peer Nitori Holdings, Nikkei learned Thursday.

Shimachu previously supported a tender offer by DCM Holdings, another industry compatriot. But it has changed tack after Nitori offered a 30% premium on DCM's terms. The decision means Nitori will not attempt a hostile takeover of the company.

Nitori will launch its tender offer as early as mid-November, aiming to turn Shimachu into a wholly owned subsidiary for 5,500 yen a share. The buyer will tap its ample funds as well as loans from Mizuho Bank to finance the deal.

DCM is conducting its own tender offer on Shimachu, which ends Monday, for 4,200 yen a share. DCM and Nitori have battled over the target company since Oct. 29, when Nitori announced its takeover proposal, and Shimachu had launched a special committee to review the new offer.

A key question is whether DCM will raise the price of its offer before Monday. Without a price hike or an extension to the tender offer, the advantage would belong to Nitori, which has Shimachu's support.

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