Nissin President Denies Katokichi Acquisition With Japan Tobacco

Source from:  nasdaq.com (RTTNews)  11/23/2007

Koki Ando, president of Nissin Food Products Co, on Thursday refuted media reports that his company was planning to jointly acquire frozen food maker Katokichi Co with Japan Tobacco Inc in the near future. "There are no plans for Japan Tobacco to hold a stake (in Nissin) immediately," Ando said in a press conference. He did not rule out the possibility of such a joint acquisition at a later date, however. Earlier in the week, instant noodle maker Nissin and Japan Tobacco had jointly declared that they were planning to acquire Katokichi in the hopes of creating the largest frozen food provider in the country. Ando did not provide a reason for reconsidering the decision. It is not clear if Japan Tobacco will try to pursue the acquisition by itself. According to the original statement, Japan Tobacco was to launch a tender offer for Katokichi to take full control of the firm, and then sell 49 percent of the Katokichi shares to Nissin. The deal was to be worth 100 billion yen as Katokichi has a market capitalization of 70 billion yen. Katokichi has been under pressure as it reported a record group net loss of 9,874 million yen for the year ended in March due mainly to an accounting scandal that came to light earlier this year. In addition, Katokichi was hit by a food safety scandal, in which a subsidiary was forced to suspend the sale of croquettes that were found to have used mislabeled meat. For the current year to March 2008, Katokichi estimates group sales of 215.4 billion yen, a plunge of some 30 pct from the previous year, and operating profit of 5.4 billion yen, a fall of almost 50 percent. Enditem