ITOCHU Corporation (TSE:8001) launched a tender offer to acquire additional 9.56% stake in Descente Ltd. (TSE:8114) for ¥20.2 billion on January 31, 2019. ITOCHU Corporation will acquire a maximum 7.2 million shares of Descente Ltd. under a tender offer deal for an offer per share of ¥2800 and the deal value will be paid in cash. ITOCHU Corporation already holds 30.4% stake and post completion of the deal, it will hold 40% stake in Descente Ltd. It is not intended to delist Descente Ltd. as part of the deal. ITOCHU Corporation plans to have discussions with respect to the appointment and reduction of number of Directors of Descente Ltd. with the management of Descente Ltd. and in case, it does not result in agreement, post completion of the tender offer, ITOCHU Corporation might submit a proposal with respect to appointment of Directors of Descente Ltd. to the shareholders of Descente Ltd. The deal is subject to maximum tender of 7.21 million shares of Descente Ltd. The minimum number of shares to be purchased is not set for the deal. The transaction turned friendly to hostile.

The Board of Directors of ITOCHU Corporation passed a resolution for the deal on January 31, 2019. The Board of Directors of Descente rejected the transaction on February 7, 2019 and advised its shareholders not to apply for the tender offer. The tender offer will run from January 31, 2019 to March 14, 2019. The impact of the tender offer on ITOCHU Corporation's consolidated business results in the fiscal year ending March 31, 2019, will be limited and there will be no change in the ¥500 billion of forecasted net profit attributable to ITOCHU Corporation. GCA Corporation (TSE:2174) acted as financial advisor to ITOCHU Corporation. Nomura Securities Co., Ltd. acted as tender offer agent for the deal. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. acted as financial advisor and Mori Hamada & Matsumoto LPC acted as legal advisor for Descente.