Cerberus, Lone Star among bidders for Takefuji: sources

By Junko Fujita

TOKYO (BestGrowthStock) – U.S. private equity firms Cerberus Capital Management, Lone Star and Fortress Group (FIG.N: ) are among those planning to bid for failed Japanese consumer lender Takefuji Corp, three sources said, in a deal that could be worth as much as $955 million.

The first round of bidding, in which firms are required to give the size of their offer and their plans for restructuring Takefuji, will close on December 15, said the sources, who have direct knowledge of the deal.

Bidders will likely offer between 60 and 80 billion yen ($715-955 million) for the business, the sources said. They asked not to be named because the process is not public.

J.C. Flowers & Co, the top shareholder of Shinsei Bank (8303.T: ), and Elliott Management, which operates a loan servicing business in Japan, may also submit bids, one of the sources said.

All the funds either declined to comment or could not be immediately reached. No one at Takefuji was currently available for comment.

Distressed asset investors, such as Lone Star and Cerberus, bought a string of Japanese assets in the 1990s when the economy was in a deep slump, but they have slowed down their purchases in recent years, unable to find attractive investment targets.

Takefuji filed for bankruptcy in September, owing 433 billion yen, becoming Japan’s largest consumer lender to fail since a court ruling in 2006 forced the industry to repay borrowers for excessive interest charges.

The bulk of Takefuji’s debt is expected to be forgiven as part of any deal, the sources said.

Shinsei Bank (8303.T: ) is acting as an adviser on the sale.

(Additional reporting by Taro Fuse; Editing by Joseph Radford and Nathan Layne)

Cerberus, Lone Star among bidders for Takefuji: sources