Court rejects attempt to block Seibu takeover

Yuji Tsutsumi, whose father founded the Seibu railway and resort group, was rejected yesterday for the second time in his attempt to block a $1.3 billion takeover led by Cerberus Capital Management LP, his lawyer said.

The Tokyo District Court denied Tsutsumi's request for an injunction against a sale of shares to Cerberus, a New York-based buyout fund, and Nikko Principal Investments Japan Ltd., and ruled the offering can proceed, attorney Kenji Hashidate said.

Seibu Railway Co. and closely held parent Kokudo Corp. last month said Kokudo will sell $1.14 billion of new shares to the funds in January, diluting the Tsutsumi family's holdings in Seibu's assets, which include 80 hotels, golf courses and ski resorts in Japan and overseas.

"The court ruling was reasonable," said Kokudo spokesman Takefumi Hanada. "It shows our restructuring, selection of investors and share sale are rational." Kokudo will seek shareholders' approval of the plan at a meeting today, he added.

Kokudo and its commuter rail network are being reorganized after Seibu was delisted a year ago because Kokudo held more shares than allowed under Tokyo Stock Exchange rules. Yoshiaki Tsutsumi, former Kokudo chairman and also a son of Seibu founder Yasujiro Tsutsumi, was fined and given a 30-month suspended jail term in October on charges of insider trading and falsifying shareholder records.

Yuji Tsutsumi failed in an earlier attempt to block the bailout plan last month when the court rejected his request to block a Kokudo shareholders meeting.

Tsutsumi has joined other Seibu heirs to file a lawsuit in state court in Honolulu in which they seek to establish themselves as the owners of the Hawaii Prince Hotel Waikiki, Mauna Kea Beach Hotel, Hapuna Beach Prince Hotel and Maui Prince Hotel, which are part of the Seibu Railway empire. That suit is pending and was not affected by the ruling in Japan.