Blackstone, Bain Eye $6.3 Billion Fuji Media Property Deal

Blackstone, Bain Capital and Warburg Pincus are expected to submit final bids for Fuji Media’s property business by the end of October, potentially setting up one of Japan’s largest real estate takeovers.

Fuji Media expects its Sankei Building unit to be valued at roughly 1 trillion yen ($6.3 billion), including debt, according to people familiar with the sale. BGO, a real estate investment firm owned by Canada’s Sun Life Financial, is also preparing a binding offer.

Selling the entire unit could create a landmark Japanese property transaction, although questions remain over whether Fuji Media will divest all or only part of Sankei Building.

Vasanta Master Fund, which owns less than 1% of Fuji Media, has called for greater transparency. In a September 30 letter, the shareholder requested more information about Sankei’s asset values, the proposed transaction structure and alternatives including a partial sale, spin-off or phased disposal of properties. It also sought clarity on how Fuji Media would use the proceeds.

Quiddity Advisors analyst Travis Lundy said uncertainty remains over Fuji Media’s plans, adding that selling the entire business could attract a higher price.

Fuji Media is expected to seek shareholder approval after selecting a preferred bidder. The company said it continues to evaluate the method, scale and timing of potential investments involving its property business and will disclose details once a decision is reached.

The bidding highlights strong global investor interest in Japanese real estate. Office demand, relatively open foreign ownership rules and the weak yen have helped make Japan an attractive property market.

Japanese land prices increased 1.5% in the year through July 1, extending gains for a fifth consecutive year. Meanwhile, mergers and acquisitions involving Japanese real estate assets reached $15.5 billion as of October 5, up 45% from a year earlier and the highest comparable total since 2013, according to LSEG data.

Fuji Media began considering property divestments after pressure from activist investors, including Dalton Investments and funds associated with Japanese activist Yoshiaki Murakami. The broadcaster also repurchased around 30% of its shares for 235 billion yen in February, allowing major activist shareholders to exit.