A model gets ready to try Nissin Food Products's Space Ram"
© AFP/File Yoshikazu Tsuno

TOKYO (AFP) - The cup noodle giant said it had agreed to launch a tender offer in the aim of acquiring a 33.4 percent stake in Myojo.

Nissin, which introduced instant noodles in Japan and later the United States, emerged as a 'white knight' after Myojo sought its help to ward off the bid from Steel Partners Japan Strategic Fund.

The noodle giant will launch the tender offer from Thursday until December 14, a move which could unleash a bidding war with the US private equity fund.

Last month, the fund -- which is the largest shareholder in Myojo with a 23.1 percent stake -- announced a tender offer to take a full control of the company but Myojo immediately rebuffed the approach.

Nissin, which currently holds no stake in Myojo, will offer 870 yen per share, compared with Steel Partners' 700 yen bid.

"The company considered that the takeover bid by Steel Partners would not increase its value and shareholder returns," Myojo said in a statement.

"The company therefore approached and started discussions on the possibility of a capital and business tie-up with Nissin Food Product, with which we believed we could achieve an extremely high synergy effects," Myojo added.

Adding spice to the noodle tussle, Steel Partners last week criticised Myojo for "misleading statements" about its offer.

"We would like to set the record straight so that (shareholders) can make an informed decision," fund partner Warren Lichtenstein wrote in an open letter to Myojo investors.

"We believe shareholders should be focused on the fact that we are a long-term shareholder of Myojo who is offering a premium to all shareholders for their shares and an opportunity for all shareholders to achieve liquidity with no minimum acceptance condition," he added.

Lichtenstein said that the fund had held several rounds of discussions with Myojo management about its intention to increase its stake so the bid was not unexpected.

Myojo said its current management team would remain in place after any tie-up with Nissin which would a create a cup-noodle giant controlling more than 50 percent of Japanese instant-noodle output.

The friendly bid was approved at Nissin's extraordinary board of directors' meeting, the instant-noodle giant said.

©AFP