Fuji Media’s real estate unit attracts 1 trillion yen bids

[TOKYO] Fuji Media Holdings has received stronger-than-expected interest in its real estate subsidiary, attracting bidders including KKR, Blackstone and Goldman Sachs Group, people familiar with the matter said.

More than 15 firms submitted bids for Sankei Building last month, with several offers exceeding 1 trillion yen (S$8.7 billion), said the people, asking not to be identified discussing confidential information. That compares with 500 billion to 800 billion yen that was seen as the unit’s value when broadcaster Fuji Media considered the deal earlier this year.

The big bids suggest the transaction will be one of Japan’s biggest-ever property deals. Last year, PAG and KKR agreed to buy Sapporo Holdings’s real estate business for 477 billion yen, while Blackstone purchased Seibu Holdings’ Tokyo Garden Terrace Kioicho for about 400 billion yen. The proposed sale reflects pressure that the Tokyo Stock Exchange and the government are putting on companies to improve corporate governance via measures such as selling off non-core assets.

Fuji Media is set to take the unusual step of re-opening the first round of bidding for its real estate subsidiary to allow more time to evaluate the offers, the people said. It wants to verify the feasibility of the proposals, including whether they are certain of being able to secure funding. The deadline for the latest bids is scheduled for mid-June.

A Fuji Media spokesperson said the company was not the source of the information, and it had no further comment. Blackstone representatives did not immediately reply to requests for comment. Spokespeople for KKR and Goldman Sachs declined to comment. BLOOMBERG