TOKYO (Reuters) - Little-known hotelier Unizo Holdings Co Ltd has found itself the center of private equity attention, with global names vying for the opportunity to buy into Japan’s property market on the cheap.

However, the rare-for-Japan takeover approach which sparked interest in Unizo has left the hotelier fighting off suitors both hostile and friendly, in an unprecedented manner that has made it a test case for government efforts to attract foreign investors via improved corporate governance and transparency.

WHO HAS BID FOR UNIZO?

Blackstone Group Inc upped the ante on Tuesday with plans to launch a 5,000 yen-per-share offer valuing the firm at $1.6 billion, having already had two proposals rejected.

That came after Unizo changed its mind about being bought out by Fortress Investment Group - backed by Japan’s SoftBank Group Corp - whom it had enlisted to defend itself from an offer by Japanese travel firm H.I.S. Co Ltd.

Unizo, which owns office buildings in Tokyo, New York and Washington, also rejected a bid from an unidentified local fund

In the interim, U.S. hedge fund Elliott Management bought its way up to become Unizo’s top shareholder with 13.14%. Japan’s Ichigo Asset Management also disclosed a stake of almost 7% and British bank Barclays PLC said it holds over 6%.

WHY IS UNIZO ATTRACTIVE?

Unizo’s stock has risen about 150% to 4,945 yen since H.I.S. on July 10 first bid for a controlling stake in the hotelier. Yet that still pales in comparison to the value of its assets which UBS analysts pegged at over 7,800 yen per share. That means any buyer would gain Unizo’s properties at a discount.

(GRAPHIC: Unizo's share price - )

Moreover, though it is not uncommon for Japanese stocks to trade well below book value, Unizo lacks the defenses from hostile takeovers that domestic companies traditionally enjoy.

The firm, whose assets include hotels and offices, was a beneficiary of a surge in property prices when investors flocked to real estate in response to government efforts since 2012 to stimulate economic activity by reducing borrowing costs.

Property firms’ stock prices, however, did not rise in tandem, resulting in a gap between lackluster shares and surging asset values. That has given suitors the chance to gain expensive real estate by buying cheap landlords.

However, unsolicited bids are rare in Japan as firms often have a web of cross-shareholding loyalties with domestic peers which together could block any takeover attempts. The consequent absence of such bids has also made them taboo.

Making Unizo different is the lack of cross-shareholding as well as the reduced influence of founding firm Mizuho Financial Group Inc following a series of share sales. Those sales diluted holdings, made it easier for outsiders to buy Unizo stock and reduced the number of stable shareholders.

Breaking the taboo was the offer from domestic firm H.I.S. led by a chief executive known for bold deal-making, Hideo Sawada.

WHY DID UNIZO REJECT THE BIDS?

Unizo hired banks to find a “white knight” bidder and thwart a takeover by H.I.S., whose offer it dismissed as too low. It received 16 bids and in August said it would support a 4,000 yen-per-share offer from Fortress.

However, it pulled its support for Fortress in September saying the asset manager would not agree to new - and unusual - conditions including establishing a mechanism where a group of 299 non-executive employees would control the new owner’s power to sell assets.

Though spurned, Fortress nevertheless extended its offer period for the third time on Thursday to Nov. 1.

Unizo also rejected two proposals from Blackstone, saying the U.S. firm would not meet the conditions placed on Fortress.

Blackstone said it would consider options including pursuing its tender offer if Unizo did not agree to a third proposal by Oct. 23. On Thursday, Elliott Management said Unizo should consider Blackstone’s proposal, saying it would consider measures should the board fail to act in accordance with its duties.

Unizo has also said it rejected a bid from a “locally renowned” fund which it said was unable to prepare the money needed.

WHAT ABOUT DISCLOSURE?

H.I.S. in August dropped its offer and has since sold most of its near 5% stake in Unizo, relinquishing the status of Unizo’s biggest shareholder to Elliott which built up its stake following the H.I.S. bid.

Elliott demanded further explanation from Unizo as to why it pulled out of a deal with Fortress, saying it was “concerned about the lack of disclosure and the risk of conflicts of interest”. Unizo said it disputed Elliott’s claim.

Unizo did not initially disclose the conditions placed on Fortress, prompting commentators to point to the government’s corporate governance push which they say has broadly succeeded in winning investor confidence, albeit for extreme cases.

Such cases include Kansai Electric Power Co Inc saying executives had received payments from a local official, and the ouster and arrest of former Nissan Motor Co Ltd Chairman Carlos Ghosn for financial misconduct, which he denies.