Wal-Mart hikes Seiyu stake to 95%

Wal-Mart Stores Inc., the world's biggest retailer, gained a solid foothold in the tricky Japanese market when it increased its stake in Japanese chain Seiyu to 95.1 percent through a tender offer. The retail behemoth plans to have full ownership in the Japanese chain.

During the offer which ran from October 23 until earlier Tuesday, Seiyu shareholders tendered a total of 441.9 million shares and all preferred shares Wal-Mart doesn't own. The latter hiked its stake from 50.9 percent to 95.1 percent for Y93.29 billion. With regard to voting rights, Wal-Mart's stake in Seiyu will rise to 97.77 percent from 64.27 percent.

Wal-Mart offered 140 yen per Seiyu share, a premium of 61 percent to the market price when the deal was announced and was widely tipped to come up triumph in the end. Wal-Mart will begin the settlement of received tenders on December 11, 2007.

Mike Duke, Vice Chairman of Wal-Mart Stores, Inc. said, "This successful result paves the way to achieve our stated goal of full ownership of Seiyu, which will enable Seiyu and Wal-Mart together to accelerate the delivery of long-term benefits to our customers, the communities we serve, our associates and our business partners."

Wal-Mart Stores, Inc. is currently the world's largest public corporation by revenue. Founded by Sam Walton in 1962, it is the largest private employer in the world and the fourth largest utility or commercial employer. It operates in Mexico as Walmex, in the United Kingdom as ASDA, and in Japan as Seiyu. Moreover, it has wholly owned operations in Argentina, Brazil, Canada, Puerto Rico, and the UK.

Seiyu, on the other hand is Japan's fifth-biggest retailer by market capitalization and operates 393 stores as of August 2007. However, it has struggled in the intensely competitive Japanese market where retail sales have fallen for eight of the past 12 months. Seiyu, per se, has lost share to larger rivals Aeon Co. and Seven & I Holdings Co and has not made profit since 2002. Shares of Seiyu have lost more than half of their value since then.

The acquisition and impending full ownership of Seiyu will help Wal-Mart expand the supermarket, speed up shop overhauling and slash procurement costs.