Digico in Takeover Bid for Japanese Jewelry Retailer Verite

Digico Holdings Ltd, a leading diamond jewelry group and a DTC Sightholder, announced Wednesday a friendly takeover bid for Tokyo based-Verite, a major Japanese jewelry retail store chain with 104 stores for a reported ¥3.12 billion ($30.8 million).

Digico will pay ¥220 for each Verite share, a 29 percent premium over the average closing price of the shares in the past month, with the aim of reaching a 50.1 percent holding. Verite’s board is supporting the acquisition plan.

Established in 1948 and a listed company at the Tokyo Stock Exchange since 1991, Verite’s sales exceed $100 million annually.

Digico was established in 2000 in Hong Kong and is strongly associated with its affiliate Gitanjali. It is one of the largest vertically integrated diamond and jewelry groups, with diamond manufacturing in Thailand, China and India, focusing on Hearts & Arrows, ideal and special cuts. Its jewelry portfolio ranges from affordable to exclusive diamond jewelry.

Gitanjali has over 1,500 points of sale and is diversifying into franchising retail opportunities for jewelry and lifestyle goods. It owns two U.S. regional jewelry chain stores – Samuels and Rogers.

Digico said that with the successful acquisition of Verite, it is looking forward to strengthen its vertically integrated rough to retail business model and expanding its retail business in Japan. In doing so, the company expects it to have a “significant contribution in transforming the world jewelry market into one dominated by desired brands.”

Loet Kniphorst, global head of International Diamond and Jewelry Group at ABN Amro bank, the lead bankers for the takeover, said the “friendly takeover of Verite will add retailing capability for the Digico Group to the important Japanese jewelry market and in our opinion fits well in the global strategy of the group.”