Announcement Regarding Capital and Business Alliance with Itochu Corporation, Issuance of New Shares by Third-Party Allotment, and Changes in Major Shareholders

Overview of Capital and Business Alliance

Sun Frontier Fudosan Co., Ltd. has concluded a capital and business alliance agreement with Itochu Corporation and resolved to conduct a third-party allotment of new shares to Itochu Corporation. The number of shares to be issued is 5,500,000, corresponding to approximately 11.28% of the total issued shares. As a result, Itochu Corporation is expected to become a major shareholder. Additionally, SI Co., Ltd., a wholly owned subsidiary of Itochu Corporation, will conduct a tender offer aiming to acquire up to 22.41% of the shares. The business alliance will involve various collaborations leveraging the strengths of both companies, including expansion of real estate revitalization and hotel/tourism businesses, procurement efficiency of materials and equipment, and strengthening cooperation with local governments.

Purpose and Use of Funds Raised, and Future Outlook

The approximately 13.4 billion yen raised through this third-party allotment will be allocated to real estate acquisition and construction costs associated with new hotel development (about 6 billion yen) and real estate acquisition and construction costs for urban office revitalization projects (about 6.8 billion yen). Through this, Sun Frontier Fudosan aims to expand its business and improve profitability, enhancing corporate and shareholder value over the medium to long term. The tender offer price is set at 2,800 yen, which includes a premium over the market price, reflecting consideration for the protection of minority shareholders' interests. Both companies will establish a joint alliance promotion committee to advance their collaboration going forward.