MBK will buy 35,000,000 new convertible preferred shares of Tokyo-headquartered Tasaki, subject to approval by the company's shareholders at an extraordinary general meeting scheduled in September. It did not provide further details of the new shares being issued. Taking a simplistic assumption that each preferred share converts into one common share, MBK will ultimately own 48% of Tasaki's enlarged capital base.
Tasaki, which is listed on the Tokyo Stock Exchange, was established in 1954 and has strong brand equity as a pearl manufacturer and distributor. Its flagship is the Tasaki Shinju Ginza Store, also known as the Tasaki Jewellery Store, which opened in October 1997. The brand is well-entrenched in Japan with a network of shops and a presence in leading department stores. Tasaki also has stores spread across Hong Kong, Macau and China.
Tasaki has pearl culturing farms in a number of islands in Japan and a research facility in Tokushima. It is associated with commercialising the Mabe and South Sea pearls. The Mabe is a semi-spherical pearl with a highly individual sheen which Tasaki brought into production in 1970. The South Sea pearl was earlier found in warm tropical seas, but in 1983, Tasaki managed to mass produce the pearls in Japan's sub-tropical waters.
The investment by MBK will be used to restructure Tasaki, which is currently loss-making, to enhance its competitive advantage and profitability. MBK has worked with the jewellery firm's management team to develop a business plan to strengthen TasakiÆs domestic and overseas business expansion strategies and improve its balance sheet.
MBK Partners was established in March 2005 and focuses on buyouts in North Asia. It has approximately $2.5 billion under management, and has invested in large and mid-sized companies across sectors, including telecommunications and media, financial services, business services, consumer goods, logistics and heavy industrials, in Japan, Korea and Greater China. It has offices in Tokyo, Seoul, Shanghai and Hong Kong. Its investments include: Yayoi in Japan; C&M, Hanmi Capital and HK Mutual Savings Bank in Korea; and China Network Systems and AsiaPharm in Greater China.
Yesterday, TasakiÆs shares closed 2.73% lower at Ñ142.