Itochu plans to buy out Dentsu Soken for $1.3 billion

Japanese trading company Itochu has decided to launch a tender offer to buy out shares in IT company Dentsu Soken and take it private. The deal is valued at approximately 215.2 billion yen, or $1.3 billion, The Japan Times reports.

Terms of the offer

Itochu intends to acquire nearly 75 million Dentsu Soken shares at a price of 2,880 yen per share. The tender offer is scheduled to begin around early November and end in early December.

The offer will be conducted through a company that will be 80% owned by Itochu and 20% owned by its subsidiary IFP. If successful, the transaction is expected to end the practice of simultaneously listing the parent company Dentsu Group and its subsidiary Dentsu Soken on the stock exchange.

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Dentsu Group’s participation

Dentsu Group, which owns approximately 62% of Dentsu Soken, will not tender its shares. After the acquisition, it will cooperate with Itochu in managing Dentsu Soken’s business. Dentsu Soken provides information technology and consulting services.

Dentsu Soken also plans to enter into a business alliance agreement with Itochu Techno-Solutions. The companies will cooperate in IT infrastructure amid growing demand for artificial intelligence implementation.

On the morning of August 31, Dentsu Soken shares fell by as much as 2.2% and were trading at 2,855 yen as of 11:00 a.m. Tokyo time. Itochu shares lost as much as 1%, while Dentsu Group’s quotations fluctuated between gains and losses.