Japanese home furnishings retailer Nitori Holdings Co. is considering launching a hostile takeover bid for do-it-yourself and hardware stores operator Shimachu Co., rivaling an offer made earlier in the month by DCM Holdings Co. in a deal worth up to 163.6 billion yen ($1.5 billion), sources close to the matter said Tuesday.

Hoping to sway Shimachu's shareholders, Nitori may make an offer later this month exceeding 4,200 yen ($40) per share which DCM is paying in a tender offer through Nov. 16, the sources said.

Shimachu's board has said it supports the offer by DCM, a bigger operator of DIY store chains based in Tokyo.

On the Tokyo Stock Exchange on Tuesday, Shimachu shares ended at 4,195 yen.

For DCM, an acquisition of Shimachu, if successful, will make it the biggest DIY store operator in Japan with annual sales of around 500 billion yen, surpassing the current leader Cainz Co.

Nitori, running about 560 stores across Japan and around 70 overseas as of August, hopes to expand its operation in Tokyo and surrounding prefectures by acquiring Shimachu which has around 60 stores.

Domestic retail firms have been struggling to expand owing to Japan's rapidly aging population, intensifying competition among such businesses as home furnishings retailers, hardware stores and drugstores.

Nitori, known for its affordable products, has been growing steadily, posting a double-digit rise in sales and profit in the first six months of its current business year through August. The coronavirus pandemic has helped boost its sales as people spend more time at home.

==Kyodo

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