Key facts
- Hikari Tsushin, MBK, and an NEC unit are launching a $1.7 billion buyout for Leopalace21.
- Leopalace21 is a Japanese apartment management company.
- The tender offer aims to take Leopalace21 private.
- Leopalace21 halted its real estate development business in 2018 following construction defects.
Japanese holding company Hikari Tsushin, in conjunction with MBK and an NEC unit, has initiated a tender offer to acquire Leopalace21, aiming to take the apartment management company private in a deal valued at $1.7 billion. Leopalace21 has been undergoing restructuring since 2018, when it ceased its core real estate development business due to construction defects that came to light that year. Fortress Investment Group had previously assisted Leopalace21 with its restructuring efforts.
Hikari Tsushin, founded by Yasumitsu Shigeta, is described as an outlier in corporate Japan, operating with a Berkshire-inspired capital-allocation framework. The company's core business involves distributing essential services like electricity, gas, telecom lines, and insurance through a network of agency partners. Hikari Tsushin has demonstrated consistent growth, with operating profit compounding above 20% over the past 15 years. The company has also strategically deployed borrowed funds into undervalued Japanese equities and a significant stake in Berkshire Hathaway.