By Kane Wu and Makiko Yamazaki
HONG KONG/TOKYO, Oct 6 (Reuters) - Blackstone, Bain Capital and Warburg Pincus are among global investors expected to submit final bids for the property unit of Japanese broadcaster Fuji Media by the end of this month, said two people with knowledge of the sale.
Fuji Media expects a deal would value the unit at around 1 trillion yen ($6.3 billion) including debt, said the people, adding that BGO, a real estate investment firm under Canada's Sun Life Financial, also plans
to submit a binding offer for the unit, Sankei Building.
If the entire unit is sold, it would mark one of Japan's largest-ever real estate takeovers.
A Fuji Media shareholder, however, has urged greater transparency in the Sankei Building transaction, according to a September 30 letter seen by Reuters.
In the letter to Fuji Media's group CEO Kenji Shimizu, Vasanta Master Fund argued that the size and complexity of the real estate portfolio could limit potential buyers to a handful of large private equity firms, which may not result in enough upside for existing shareholders.
Vasanta Master Fund, which owns less than 1% of Fuji Media shares, requested more disclosure on the value of Sankei's assets, the transaction structure and options such as a partial sale, a spin-off or a phased sale of individual assets, and the use of proceeds.
"There is a fair bit of uncertainty regarding Fuji Media's intentions — whether they will sell 100% or just a part. The price will be better if they sell all of it," said Travis Lundy, an analyst at Quiddity Advisors who publishes on Smartkarma.
Fuji Media is expected to seek shareholders' approval after choosing a preferred bidder, said one of the people and a separate person. The people declined to be named as the information is confidential.
Fuji Media said in a statement "the method, scale, timing, and other details" of possible investments in its property unit were being evaluated, and it would make an announcement once a decision has been taken.
Blackstone, Bain and Warburg Pincus declined to comment. BGO did not respond to a Reuters request for comment.
ROBUST JAPANESE MARKET
The interest from global investment firms to acquire Sankei Building underscores Japan's status as one of the hottest real estate markets, thanks to strong demand for office tenancy and openness to foreign ownership and a weak yen.
Land prices rose 1.5% in the year to July 1, marking a fifth straight year of gains and maintaining the strongest pace of growth since the aftermath of the country's asset-price bubble more than three decades ago.
Mergers and acquisitions targeting Japanese real estate assets totalled $15.5 billion as of October 5, up 45% year-on-year and the highest level for the same period since 2013, LSEG data showed.
The planned divestment of the property unit comes after Fuji Media faced pressure to offload real estate assets and unwind cross-shareholdings from activist investors including US-based Dalton Investments and funds linked to veteran Japanese activist Yoshiaki Murakami.
In 2024 a Dalton affiliate said Fuji Media should consider going private — an option more Japanese firms are taking after the Tokyo Stock Exchange put in place stricter governance criteria.
In February, the broadcaster bought back about 30% of its shares or 235 billion yen's worth, allowing major activist shareholders to exit, and announced it would begin considering divesting its real estate holdings, including Sankei Building.
(Reporting by Kane Wu in Hong Kong and Makiko Yamazaki in Tokyo; Additional reporting by Anton Bridge in Tokyo; Editing by Sumeet Chatterjee and Edwina Gibbs)
