Japanese electronics retailer Yamada Denki Co will take over home furnishing store Otsuka Kagu, the companies said on Thursday, after the furniture chain struggled to compete with cheaper rivals and to overcome a family-and-boardroom feud.
Otsuka will issue 4.3 billion yen in new shares to Yamada Denki, giving it 51.74% of the company, they said.
While the move is set to dilute the value of existing shares, Otsuka’s stock shot up 31%, their daily limit, to close at 212 yen.
Otsuka, already suffering from tough competition from cheaper furniture stores such as Nitori Holdings and global chain IKEA, failed to recover from negative publicity on a battle between the company’s founder and his now-CEO daughter.
The pair’s power struggle led to a proxy battle in 2015, an emotional showdown that was played out on national television.
Source: Reuters.com