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Tokyo - British retailer Tesco PLC is launching a cash tender offer to purchase all the issued shares of C Two-Network Co., a Japanese food retailer, reports The Kyodo News Service.
The board of directors of C Two-Network, which operates 78 stores mainly in the Tokyo metropolitan area, passed a resolution the same day, giving its full support for the offer, and recommended acceptance of the offer to the company's shareholders.
Under the terms of the offer, which runs for 30 days through July 10, Tesco's subsidiary, Tesco Holdings BV, will offer a price of 3,400 yen in cash for each share in the Japanese retailer, giving a total consideration of 32.8 billion yen, or the equivalent of $286 million.
Tesco will purchase all shares tendered to it, conditional on its receiving enough tenders to bring its shareholding in C Two-Network to a minimum of 66.7 percent.
''It is Tesco's ultimate intention to acquire 100 percent of the issued shares of C Two-Network,'' the British retailer said in a statement.
Tesco Chief Executive Terry Leahy said in a press release the acquisition of C Two-Network would provide Tesco with ''an excellent opportunity to enter a large and unconsolidated market where we have potential to grow.''
The offer of 3,400 yen per share represents a premium of 35 percent over the average daily close of C Two-Network shares in the past three months, the two companies said.
As a result of the tender offer, C Two-Network will become a group company of Tesco, although the current management will remain and work with Tesco's management, the two firms said.
The successful completion of the offer may also result in the delisting of C Two-Network from the Tokyo Stock Exchange (TSE), it added.
Tesco, headquartered in Cheshunt, Hertfordshire, just north of London, is the largest food retailer in Britain and operates in other areas of Europe and Asia. It runs 2,291 stores globally, ranging from large supermarkets to small convenience stores.