Major furniture maker and supplier Nitori Holdings Co. is considering acquiring hardware store operator Shimachu Co., The Yomiuri Shimbun has learned.
Since fellow hardware store operator DCM Holdings Co. has already made a tender offer for Shimachu to make it a fully owned subsidiary, a fierce battle is likely to be waged if Nitori declares a takeover bid.
On Wednesday, Nitori issued a statement that it is considering the possibility of growth through mergers and acquisitions, including that of Shimachu.
DCM will buy Shimachu shares from Oct. 5 to Nov. 16 for 4,200 yen apiece, which would value the deal at about 160 billion yen. Since the management of Shimachu has already agreed to the DCM acquisition plan, Nitori's buying of Shimachu shares is expected to constitute a hostile takeover bid.
Shimachu has about 60 outlets mainly in Tokyo and Saitama Prefecture. Based in the Tokyo metropolitan area, the company is strong in furniture sales.
Nitori is a furniture and home furnishing chain that originated in Hokkaido. It now has about 560 outlets in the nation with sales of more than 600 billion yen. The company is involved in product development through sales, and also has a strong distribution network.
Nitori enjoys a strong business performance and posted higher sales and profits in its midterm settlement in August.
Nitori said in the statement it has not made any decisions regarding the buyout of Shimachu, but that "once a decision is made that needs to be announced, it will immediately be made public ."
Shimachu said Wednesday it had not received any concrete proposals and nothing had been decided.
The performance of the hardware store industry has leveled off due to competition with drugstore operators. There have been moves to reorganize the industry -- major housing equipment maker Lixil Group Corp., for example, recently decided to sell its home improvement store unit.
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