Bain Attracts Bids for Japanese Hot Spring Operator

(Bloomberg) -- Bain Capital is collecting bids for Ooedo Onsen Monogatari, an operator of about 40 hot spring inns and resorts across Japan, with SoftBank Group Corp. and investment funds submitting first-round proposals, people with knowledge of the matter said.

The U.S. investor is seeking to sell the Ooedo Onsen Monogatari group for more than 100 billion yen ($932 million), said the people, who asked not to be identified because the information isn’t public. Bain Capital is also considering an initial public offering for the hot-spring business, they said. The investment group bought the Japanese company in 2015 for about 50 billion yen, the Nikkei newspaper reported at the time.

Investors have shown plenty of appetite for hot-spring assets as well as real-estate investment trusts that invest in such leisure facilities. SoftBank-owned Fortress Investment Group has already snapped up about 100 hot-spring establishments and hotels, and has indicated that it will spend as much as 400 billion yen on the sector over the next four years.

Nomura Holdings Inc. is advising Bain on the sale, the people said. A representative for Bain didn’t immediately respond to a request for comment. Representatives from SoftBank and Nomura declined to comment.

Ooedo Onsen Monogatari is designed to evoke the atmosphere of Tokyo during feudal times, when it was called Edo, or sometimes Ooedo (“big Edo”). It also runs a REIT that invests in hot-spring properties, returning 8.6% since its inception in 2016.

The Ooedo Onsen Monogatari REIT rose as much as 1.7% in early Thursday trading in Tokyo, the biggest climb in three months.

To contact the reporters on this story: Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

To contact the editors responsible for this story: Yuji Okada at yokada6@bloomberg.net, Reed Stevenson, Russell Ward

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