Goldman Sachs and Seibu Railway denied a report on Friday that the U.S. investment bank had offered 900 billion yen ($8.46 billion) to buy Seibu in what would be the largest-ever acquisition of a Japanese company by a foreign firm.
The Nihon Keizai newspaper said Goldman was eyeing the Seibu Railway group's huge real estate holdings, which include dozens of hotels and golf courses.
The business daily, citing unnamed Seibu officials, said Goldman had proposed buying close to 500 billion yen ($4.70 billion) in Seibu shares owned by Kokudo Corp., a group firm that is Seibu Railway's main shareholder, and taking on Kokudo's debts.
"We have not proposed acquiring the Seibu Railway group," a Goldman spokesman said. The head of an internal panel restructuring Seibu Railway and its affiliates also said that there had been no such offer.
The paper said Goldman had offered 1,600 yen a share for the Seibu Railway stock, nearly four times the last price at which the stock traded before it was delisted late last year.
Seibu's shares plunged in October after it was revealed that the company had submitted false reports on its ownership structure for decades. The shares were subsequently delisted for breaking exchange disclosure rules.
Prosecutors this month arrested Kokudo's former chairman, Yoshiaki Tsutsumi, once the world's richest man, in connection with the scandal.
The reported Goldman proposal would serve as an alternative to a turnaround plan finalized on Friday by the panel. The non-binding plan calls for the group to raise 200 billion yen in capital, sell unspecified assets and streamline its complex corporate structure.
Goldman Sachs has been an aggressive buyer of distressed assets in Japan over the past several years, amassing a portfolio that includes real estate -- it is one of the country's largest golf course owners -- as well as soured corporate loans.
Goldman invested $1.4 billion in Japan's third-biggest bank, Sumitomo Mitsui Financial Group (SMFG), in 2003, taking the equivalent of a 7 percent stake in convertible preferred shares.
Seibu, a once-dominant firm that has seen the value of its assets plunge since Japan's land-and-stock bubble burst at the start of the 1990s, would seem to fit Goldman's Japanese investment strategy.
At its peak, the Seibu empire included a reported 81 hotels, 52 golf courses and 36 ski resorts in Japan and abroad, and the group's still-substantial real estate portfolio includes prime land in central Tokyo and name-brand properties such as the Prince Hotel chain.
The Nihon Keizai said the group owns about 50 golf courses.
As well as being Japan's biggest foreign buyout, a Goldman purchase of Seibu would also rank among the country's top 10 mergers and acquisitions deals, according to data firm Dealogic.
Goldman may have timing on its side, as real estate prices are showing signs of bottoming out more than a decade and a half after Japan's asset bubble burst.
The pace of nationwide land-price declines slowed last year, a government survey showed earlier this week, while residential land prices in central Tokyo rose for the first time in a decade and a half.
