Japan Tobacco And Nissin to Buy Katokichi -- Paper

Source from:  malaysia.news.yahoo.com TOKYO, Nov 20 11/20/2007

Japan Tobacco Inc and instant noodle maker Nissin Food Products Co Ltd plan to team up to acquire scandal-hit frozen food company Katokichi Co Ltd in a deal expected to reach 100 billion yen , the Nikkei business daily reported on Tuesday. Under a proposed deal, Japan Tobacco would buy all of Katokichi shares through a tender offer and then sell a 49 percent stake to Nissin after Katokichi has been delisted, the newspaper said. The three companies are expected to come to an official agreement this month, the Nikkei said. None of the companies could be reached immediately for comment. Katokichi's stock has halved since March when media reports of improper accounting surfaced. In April, the company reported improper transactions with several other companies worth 98.5 billion yen over a six-year period. In addition to the accounting problems, a Katokichi subsidiary was recently reported to have been involved in mislabeling of ground beef. Japan Tobacco, which took a 5 percent stake in Katokichi in 2000, hopes the acquisition will help it strengthen its food- related operations as it looks to offset declining demand for cigarettes in the Japanese market. Nissin aims to bolster its fresh and frozen-food operations with the domestic instant noodle market saturated. The deal would give it access to Katokichi's udon noodle business, the Nikkei said. Enditem