ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Business

Sompo Japan to pay 26bn yen or more for nursing home operator

TOKYO -- Sompo Japan Nipponkoa Holdings will fork over at least 26 billion yen ($210 million) in a two-stage acquisition of eldercare provider Message Co. under terms announced Friday by the insurer.

     Sompo Japan aims to raise its 3.5% stake in Message to 51% or higher. An initial tender offer will kick off Monday to acquire 34.69% of outstanding shares for 2,500 yen apiece from Message's founder, his wife and his asset management company.

     The second stage of the takeover will begin Jan. 29. Sompo Japan will offer ordinary shareholders 3,500 yen a share, or a roughly 49% premium on Thursday's closing price. Depending on the results of the second stage, the insurer will likely pay 30 billion yen to 40 billion yen for the acquisition.

     Message will become a consolidated subsidiary of Sompo Japan in March. It will be renamed Sompo Care Message in June or later. The care provider will stay on the Tokyo Stock Exchange's Jasdaq market. Sompo Japan is expected to appoint three of the company's 10 board members.

Growth opportunity

Message's sales rose 6% to 78.9 billion yen for the year ended March 31, while operating profit surged 10% to 7.3 billion yen. Sompo Japan acquired care provider Watami no Kaigo this October and renamed it Sompo Care Next in December. The two nursing home operators' sales totaled 114.3 billion yen for fiscal 2014. Sompo Japan will thus likely rise to second place in Japan's eldercare market, ahead of Benesse Holdings' 87.3 billion yen nursing care business. Nichii Gakkan will remain on top for now.

     Sompo Japan anticipates strong growth in the eldercare industry and looks to make the business a core source of profit, alongside domestic insurance and overseas operations.

     Message has been working to revamp operations and rehabilitate its image in recent months. News emerged in September of fatal falls by residents of a nursing home run by a subsidiary, while November brought a government reprimand for that and other violations. Sompo Japan intends to expand risk and personnel management measures to help address these issues. The insurer also looks to make operations at the company more efficient by applying information technology.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media