Retail giant Wal-Mart Stores Inc. is looking to take full control of Japanese supermarket Seiyu Ltd. by the end of the year in order to revitalize the business.
Wal-Mart currently owns 50 percent of Seiyu and is planning to acquire the remaining shares from existing holders, according to reports today.
It is thought that Wal-Mart may also buy new shares to be issued by Seiyu.
The retailer has an option in its contract with Seiyu that allows it to raise its stake to 66.7 percent by the end of this year, but it is unlikely that this will be taken up as the exercise price is far lower than current price levels of Seiyu stock.
The stock has been trading above 85 yen recently after hitting an all-time low of 74 yen on Sept. 21. The Tokyo Stock Exchange has suspended trading in the issue to give investors time to confirm information about the proposed plans.
Since gaining its 50 percent stake in 2002, Wal-Mart has spent 147 billion yen on rebuilding the company, but still the company is performing poorly with a consolidated net loss of 10.4 billion yen expected for the business year ending in December.
October 22, 2007
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