Nissin Buys 86% Stake in Myojo After Steel Partners Offer Fails

Nissin Buys 86% Stake in Myojo After Steel Partners Offer Fails

By Yasue Aoi

Dec. 15 (Bloomberg) -- Nissin Food Products Co., Japan's largest instant noodle maker, said it acquired an 86 percent stake in Myojo Foods Co. for 32 billion yen ($271 million) after an offer by U.S. investment fund Steel Partners failed.

``Myojo will become a unit of Nissin as of Dec. 22,'' Nissin said in a statement to the Tokyo Stock Exchange today. The tender offer, which was a 31 percent premium on Myojo's average share price during the past three months, expired yesterday.

Nissin offered 870 yen a share for the stake, exceeding the 700 yen per share offer made by Steel Partners, controlled by U.S. investor Warren Lichtenstein. The investment fund, which last month said it was withdrawing its offer for Myojo, sold its 23 percent shareholding, the biggest held in the noodle maker, to Nissin for 8.56 billion yen, it said in a statement today.

The alliance between Myojo and Nissin may benefit the companies' overseas business, improve corporate governance and enhance efficiency. The two companies will together grab 23 percent of the instant noodle market, they said last month.

Nissin said 1,379 shareholders offered to sell their Myojo stock, which totaled 36.7 million shares.

Myojo, which was founded in Japan in 1950, sells Chicken Tanmen quick cooking soup noodles and has six factories, with over 20 sales branches throughout Japan, according to its Web- site. It has units operating in Singapore and the U.S.

Nissin started selling Chicken Ramen in 1958 and has international brands, such as Cup Noodles. The company, established in 1948, started production in the U.S. in 1972 and has 29 companies in 11 countries outside Japan.

Offer Fails

Steel Partners said on Nov. 28 no shareholders accepted its offer to acquire the Myojo stake through a tender offer. It shifted its support behind Nissin's offer. The investment fund increased its shareholding in Nissin to 8.75 percent from 7.37 percent on Nov. 29, according to a filing to the Ministry of Finance.

``As a major shareholder in both Nissin and Myojo, Steel Partners decided to divest its entire shareholding in Myojo after positively evaluating the planned business alliance,'' Steel Partners said in an e-mailed statement.

Lichtenstein, an ally in billionaire Carl Icahn's fight to wring more value from South Korea's biggest cigarette company, has targeted a range of Japanese firms including fast-food chain Mos Food Services Inc. and Brother Industries Ltd., a maker of copiers and inkjet printers.

New York-based Steel Partners launched the first hostile overseas bid for a Japanese firm in 2003, when it sought control of Yushiro Chemical Industry Co., Japan's largest producer of machinery lubricants. That company spent $27 million, about three times its annual profit, to fend off the buyout fund.

Steel Partners in June raised its stake in Sapporo Holdings Ltd., Japan's No. 3 brewer, to 18.6 percent, according to a filing to the Ministry of Finance. Sapporo has said it may issue stock options to fend off a hostile bid.

To contact the reporter on this story: Yasue Aoi in Tokyo yaoi@bloomberg.net .