Feb. 24 (Bloomberg) -- J Front Retailing Co., Japan’s second-largest department-store operator, agreed to pay 30.1 billion yen ($374 million) for 33 percent of rival Parco Co. to add the fashion-oriented retailers’ customers.
J Front will pay 1,100 yen per share, 61 percent more than yesterday’s closing price, for the entire stake held by developer Mori Trust Co., Tokyo-based J Front said in a statement today. Parco shares jumped following a report about the sale in the Nikkei newspaper’s morning edition.
“Parco has negotiating power with the tenants and by combining, J Front probably thinks it can improve its department store business,” Mikihiko Yamato, deputy head of research for JI Asia in Tokyo, said by telephone.
J Front is adding the Parco chain to help diversify its clientele as Japan’s population shrinks and ages. The retailer paid 8.2 billion yen for 40.5 percent stake in gift and sundry shops operator StylingLife Holdings Inc. in a deal completed March 30. Department store sales in Japan fell 1.1 percent in January from a year earlier.
Parco surged 15 percent, the most in 14 years, to 782 yen at the 3 p.m. close of trading in Tokyo. J Front rose 1.5 percent to 397 yen.
Parco’s second-biggest shareholder Aeon Co., which owns a 10 percent stake, said will continue holding the shares, Koji Tsusue, a spokesman for Aeon, said by telephone.
--Editors: Suresh Seshadri, Dave McCombs
To contact the reporter on this story: Cheng Herng Shinn in Tokyo at email@example.com
To contact the editor responsible for this story: Stephanie Wong at firstname.lastname@example.org