TOKYO (Reuters) – Japanese hotel operator Unizo Holdings Co (3258.T) said on Tuesday it would reject a bid by H.I.S. Co (9603.T) to raise its stake, adding that the offer lacked synergy and was priced low, setting the stage for a potential rare hostile bid in Japan.

Japanese travel agency H.I.S. already owns a 4.79% stake in Unizo, and launched a tender offer last month to raise its holding to as much as 45%.

However, the process has turned complicated after the hotel operator’s rejection and disclosure on Tuesday that U.S. hedge fund Elliott Management had taken a 5.51% stake in Unizo, overtaking H.I.S. as the top shareholder.

Unizo said it could not expect synergies from an alliance with H.I.S. and that the price was too low.

Shares in Unizo have surged more than 80% since July 9, a day prior to the bid announcement. The offer price of 3,100 yen represented a 15% discount from Tuesday’s closing price.

Elliot’s stakeholder presence may complicate the bid process. The U.S. fund is known for buying stakes in companies that are in the middle of a takeover or an acquisition process, forcing better terms for shareholders.

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