Itochu Offers $1.56 Billion to Privatize Dentsu Soken

Dentsu Soken said Friday that Japanese trading giant Itochu Corp. has offered to acquire all shares in the IT services company that are not currently owned by parent Dentsu Group, paving the way for a roughly 250 billion yen ($1.56 billion) privatization deal.

In a regulatory filing, Dentsu Soken said Itochu is offering 2,880 yen per share for stock not held by Dentsu Inc. The proposed purchase price represents a premium of about 5% over Dentsu Soken’s closing share price on Thursday.

The announcement confirms an earlier report from the Nikkei, which said Itochu planned to spend approximately 250 billion yen to participate in taking Dentsu Soken private and delisting the company from the Tokyo Stock Exchange.

Under the proposed ownership structure, Itochu will acquire a 38.2% stake in Dentsu Soken. Dentsu Inc., part of advertising and communications giant Dentsu Group, will retain the remaining 61.8% stake following the transaction.

Dentsu Soken’s board has recommended that shareholders tender their shares and accept Itochu’s offer, signaling its support for the planned privatization.

The proposed deal comes shortly after activist investor Oasis Capital disclosed a 5% stake in Dentsu Soken. The hedge fund’s investment, revealed just over a week before the Itochu offer, had increased investor attention around the Japanese IT services company.

Dentsu Soken has a long history within the Dentsu organization. Previously known as Information Services International-Dentsu, the company was spun off from Dentsu Inc. in 1975. It later went public on the Tokyo Stock Exchange in 2000.

If the transaction proceeds as planned, Dentsu Soken will end more than two decades as a publicly traded company. The deal will also strengthen Itochu’s exposure to Japan’s technology and IT services sector while allowing Dentsu Group to maintain majority ownership of the business after its delisting.