Tokyo, July 15 - Lawson Inc, Japan's second-largest convenience store, will spend at least 3.98 billion yen ($38 million) to take control of discount grocery chain Ninety-nine Plus Inc, aiming to use acquisitions to grow in a mature market.
Lawson, which already owns 34.6 percent of Ninety-nine Plus, said it would offer 76,000 yen per share, a 50.5 percent premium to Monday's closing price, with the goal of buying the 30 percent stake held by printed circuit board maker Kyoden Co.
Kyoden said in a statement that it would tender its shares.
Lawson said that it would purchase all other shares tendered in addition to Kyoden's stake. That means the bid could cost it up to 8.8 billion yen.
Lawson, which trails industry leader Seven-Eleven in the Japanese market, has been jointly opening stores and developing private-label product brands with Ninety-nine Plus since the two struck an alliance last year.
Ninety-nine Plus has carved out a niche for itself in Japan's mature retail market by offering fresh vegetables, meat, stationery and other household products for 99 yen.
Lawson said taking control of Ninety-nine Plus would help it strengthen its fresh food and private-label businesses as it aims to attract a wider range of consumers, including those that don't frequent convenience stores.
Prior to the announcement, shares of Lawson closed unchanged at 5,250 yen. Ninety-nine Plus fell 1.8 percent to 49,600 yen and Seven & I Holdings, the parent of Seven-Eleven, lost 1.6 percent to 3,020 yen.
The benchmark Nikkei average .N225 slipped 2 percent.