NOTICE TO SHAREHOLDERS RESIDENT IN THE UNITED STATES:This press release relates to a proposed business combination which involves the securities of a foreign company.
It is subject to disclosure requirements of a foreign country that are different from those in the United States.
Financial statements included in the document, if any, have been prepared in accordance with foreign
accounting standards that may not be comparable to the financial statements of United States companies.
It may be difficult for any U.S. shareholder to enforce his rights and any claim he may have arising under thefederal securities laws, since the issuer is located in a foreign country, and some or all of its officers and directors
may be residents of a foreign country. Such U.S. shareholder may not be able to sue a foreign company or its
officers or directors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a
foreign company and its affiliates to subject themselves to a U.S. court's judgment.

September 27, 2004
To Whom It May Concern:
Company Name: TOKYU CORPORATIONName of Representative Director: Kiyofumi Kamijo,
President & Representative Director(Code No.9005, Tokyo Stock Exchange, First Section)
Company Name: TOKYU DEPARTMENT STOREName of Representative Director: Hirokazu Mizuta,
President & Representative Director(Code No.8232, Tokyo Stock Exchange, First Section)
Notice of Tokyu Department Store becoming
A Wholly -owned Subsidiary through Share Exchange and Tender Offerfor shares in Tokyu Department Store by Tokyu Corporation
The Boards of Directors of Tokyu Corporation (hereinafter “Tokyu”) and Tokyu
Department Store Co.,Ltd. (hereinafter “TDS”) resolved in meetings both held on
September 27, 2004 to make TDS a wholly- owned subsidiary of Tokyu through a shareexchange and executed a Memorandum of Understanding for such purpose. In
addition, today’s meeting of the Board of Directors of Tokyu resolved to commence atender offer for shares in TDS and today’s meeting of the Board of Directors of TDS
resolved to support the tender offer.
Following the conclusion of the Tender Offer for TDS shares by Tokyu, the parties plan
to execute a Share Exchange Agreement on November 15, 2004 and, subject to approvalat an extraordinary shareholders' meeting planned to be held in the latter part of January
2005, the share exchange is planned to take effect on April 1, 2005.

Transaction details
1. Purpose of making TDS a wholly-owned subsidiary
In April 2000, Tokyu formulated the Tokyu Group Management Policy and initiated athorough review of the management system of the Group with the aim of maximizing
shareholder value. Through reform of the Group’s management system, and businessrestructuring under a policy of selection and concentration the Group has pursued a growthstrategy focusing on business development in the areas along and around its railway lines.
In March 2003, the Group formulated the Tokyu Corporation Two Year Business Plan withthe aims of steadily implementing the group’s management policy and shifting to a
consolidated group management system. The plan has achieved results with respect tofinancial issues such as the early application of asset impairment accounting and the further
reduction of interest-bearing debt while also strengthening the Group through focusing on
its geographical domain, the areas along its railway lines and business domains and therailway and urban lifestyle businesses.
TDS is reforming the structure of its core department store business and pursuing aradical improvement of its consolidated profitability based on its Business Revolution
Plan formulated in January 2000. In operational terms it has established Tokyu
Department Store MD, which is its merchandising strategy, with the aim of achieving
management based on customer satisfaction and has established the basis for arevitalization of its core business through implementing measures such as the remodelingof each its stores. It is also steadily increasing the number of holders of its “Club-Q Point
Top Card ” (point card with a function of a credit card), the core of its customer strategy.
Further, despite the continued sluggish consumer spending, TDS has reformed its
business structure and achieved a major improvement in operating profit levels throughdrastic reform of its personne l system and thorough cost reductions. Additionally, withrespect to its financial structure and with the aim of focusing its resources on its corebusiness, TDS has reviewed its asset holdings, strengthened its group management
system, reorganized its subsidiaries and affiliates, and implemented its targets for the
reduction of interest-bearing debt ahead of schedule.

In consideration of the following:（ 1） Based on Tokyu group management policy and in order to promote thestrengthening of the group’s retail business in the areas around its railway lines,
Tokyu plans to position the retail business as Tokyu Group’s third core businessafter the transportation and real estate businesses. In pursuit of growth in thisbusiness, the role of TDS is important and Tokyu and TDS believe that they
can significantly raise operational efficiency through combining their businessresources.
（ 2） When direct mutual services between the Toyoko Line and Subway Line No.
13 commence, the Toyoko Line Shibuya st ation will be relocated undergroundand redevelopment of the area around Shibuya station is planned to coincidewith this move. In this respect, Tokyu needs to take the lead in the rapid
decision- making necessary to mobilize the overall strengths of the gr oup.
Tokyu has decided to make TDS a wholly-owned subsidiary and both companies haveagreed that joining together to form a single unified management system is the mostappropriate course of action.
Looking ahead, based on the Tokyu group’s management policy, the parties plan tofocus business resources on the group’s core businesses and reinforce the group’sbusiness model which aims to promote growth of its retail business while seeking
synergies with the group’s transportation business. Accordingly, the group seeks toincrease the added value in its operational domain and increase the corporate value of
the Tokyu group.
2. Information regarding the execution of the tender offer
1.Tender offer by Tokyu for the shares of TDS
At a meeting of its Board of Directors held on September 27, 2004 Tokyu decided to
execute a tender offer for the shares of TDS as follows:(1) Outline of tender offer(i)
Outline of target company: Please see ‘4.Summary of partie s
involved in the share exchange’.
(ii)Class of Shares, etc. to be Purchased: Common Shares of TDS(iii)

Tender offer period: The 38 days from Tuesday, September 28, 2004 toThursday, November. 4, 2004.

(iv)
(v)

Tender offer price : ¥175 per share.
Basis of calculation of tender offer price:(vi)

The price was determined by taking into consideration various
factors including changes in the market price of TDS shares andthe results of the calculation of the share exchange ratio.
Number of share certificates to be purchased : 117,100,000 shares
Notes:
1. If the total number of the shares tendered does not exceed thenumber of shares offered to be purchased by Tokyu, Tokyu willpurchase all such shares tendered.
2. If the total number of the shares tendered exceeds the numberof shares offered to be purchased by Tokyu, Tokyu will notpurchase all or part of such excess tendered shares, but willpurchase, deliver and make other settlements regarding thepurchase of such excess shares in accordance with the pro rata
method provided in Article 27-13, Paragraph 5 of the SEL.

(vii)

Change in number of shares owned as a result of the tender offer
Number of shares owned prior to tender offer:
67,483,580 (24.37% of total)
Number of shares to be owned after tender offer
184,583,580 (66.67% of total)
Note: Number of share certificates to be owned after the tender offer
is the number of share certificates Tokyu will own, assuming
it purchases the 117,100,000 shares that it plans to purchase.
As of September 27, 2004 the total number of TDS shares inissue is 276,859,147.

(viii)

Date of public notice of commencement of tender offer:
Tuesday, September 28, 2004.

(ix)
(x)

Tender offer agent: Nomura Securities Co., Ltd.
Funds required for tender offer: ¥20,770 million(2) Support for the tender offer by TDS
The Board of Directors of TDS has resolved that the Board supports the Tender
Offer.
2.Notice regarding TDS’s support for the tender offer
At a meeting of its Board of Directors held on September 27, 2004 resolved tosupport the tender offer for its shares by Tokyu as follows:(1) TDS has decided to support to the tender offer for TDS shares by Tokyu in theinterests of the further development of the business of TDS.
TDS believe s strongly that the increase in the percentage shareholding throughwhich TDS will become a wholly-owned subsidiary of Tokyu, will significantly
strengthen the cooperation between Tokyu and TDS, will allow stabilization of
the operations of TDS , and will contribute to the expansion of the business andimprovement of the business results of TDS.
(2) Outline of the tender offeror
Please see ‘4.Summary of parties involved in the share exchange.’
3. Information regarding the execution of the share exchange
1. Schedule for share exchange
September 27, 2004
Approval of the Memorandum ofUnderstanding for the Share Exchangeby the board of directors of bothcompanies
September 27, 2004
Execution of the Memorandum ofUnderstanding for the Share Exchange
November 15, 2004 (plan)
Approval of the Share Exchange
Agreement by the board of directorsof both companies
November 15, 2004 (plan)
Execution of the Share Exchange
Agreement
Late January 2005 (plan)
Extraordinary shareholders' meetings toapprove the Share Exchange Agreement
April 1, 2005
Date of execution of the share exchange
2. Share exchange ratio

Name of company

TOKYU（ Wholly-owningparent company）

TDS(Wholly-owned subsidiary)

Share exchange ratio

1

0.32

Notes:
1. Allotment ratio of shares:
0.32 shares of Tokyu common share will be exchanged for each one share of TDS
common share. (However, no allotment will take place with respect to Tokyu’s
holding of 67,483,580 TDS common shares or to common shares in TDS that
Tokyu purchases in the tender offer).

2. Basis of calculation of share exchange ratio:
The share exchange ratio has been calculated by Deloitte Tohmatsu Corporate
Finance Co., Ltd. for Tokyu and by KPMG FAS Co.,Ltd. for TDS. Taking theresults of those calculations into consideration, Tokyu and TDS determined andagreed upon the above ratio.
3. Results, methods, and bases of calculation by third parties:
Deloitte Tohmatsu Corporate Finance Co., Ltd. calculated the share exchange
ratio by using a composite of the market value method, the comparable trading
multiples method and the DCF (discounted cash flow) method. KPMG FAS Co.,
Ltd. calculated the assumed value of the shareholders’ equity of each company byusing a composite of the market value method, DCF method, the adjusted present
value method and the adjusted book value method, and computed the shareexchange ratio accordingly.
4. Number of new shares to be issued pursuant to share exchange:
The number of new shares to be issued pursuant to the share exchange has yet to
be decided.
5. Possibilities for simplified share exchange :As a result of Tokyu Corporation’s tender offer for TDS shares, if approval of the
Share Exchange Agreement by the board of directors is not necessitated inaccordance with the provisions of Article 358 (Simplified Share Exchange) of theCommercial Code of Japan, Tokyu will not hold an extraordinary shareholders'meeting.

4. Summary of parties involved in the share exchange(Data for Tokyu as of March 31, 2004 ; for TDS as of July 31, 2004)
Trade name
Tokyu Corporation
Tokyu Department Store
Tender offeror(TDS)(Wholly-owning parent
Target company
company)(Wholly-owned subsidiary)Line of business
Railway business
Department store business
Real estate business
Date of incorporation September 2, 1922
March 7, 1919
Headquarters lo cation
5-6 Nampeidai-cho,24-1 Dougenzaka 2-chome,(registered office) Shibuya-ku, Tokyo, Japan
Shibuya-ku, Tokyo, Japan
Representative
Kiyofumi Kamijo
Hirokazu Mizuta
President andPresident andRepresentative Director
Representative Director
Capital108,820 million yen
37,707 million yen
Total number of
1,140,974 thousand shares
276,859 thousand shares
Issued andoutstanding shares
Shareholders’
222,955 million yen
17,811 million yen
equityTotal assets
1,511,775 million yen
169,251 million yen
Fiscal year end
March 31January 31
Number of employees 3,477
2,860
Names andThe Dai-Ichi Mutual Life
Tokyu Corporation 24.37%
shareholding of
Insurance Company 7,24%
major shareholders
Nippon Life Insurance
Japan Trustee Services Bank,
Company 6.89%
Ltd. (Trust account) 3.76%
Japan Trustee Services
The Master Trust Bank of Japan,
Bank, Ltd. (Trust account)Ltd. (Trust account)
4.39%
3.58%
The Chuo Mitsui Trust and
The Dai-Ichi Mutual Life
Banking Co., Ltd. 3.31%
Insurance Company 2.70%
The Master Trust Bank of Japan,
Tokyu Department Store
Ltd. (Trust account)
Stock Mate (Venders’ Stock
3.06%
Ownership Association)
2.59%
Correspondent
The Bank of
The Chuo Mitsui Trust andbanks
Tokyo-Mitsubishi, Ltd.,
Banking Co., Ltd.,The Chuo Mitsui Trust and
The Bank of Tokyo-Mitsubishi,
Banking Co., Ltd. and othersLtd. and others
CapitalTokyu holds 24.37% of all issued and outstanding TDS shares.
Relationships
between parties
On October 1, 2004 Tokyu plans to conduct a share exchange to make Izukyu
Corporation a wholly-owned subsidiary and intends to issue 4,073,079 new shares.

5. Business performance for the last three fiscal years(Millions of Yen)
Tokyu Department Store (TDS)
Target company(Wholly-owned subsidiary)Fiscal term

Tokyu Corporation
Tender offeror(Wholly-owning parent
company)
FY ended FY ended FY ended FY ended FY ended FY ended
March
March
March
January
January
January
2002
2003
2004
2002
2003
2004

Revenue fromoperations
Operating income
Recurring income
Net income
Net income per share(yen)
Annual dividend pershare (yen)Shareholders' equity
per share (yen)301,959
42,196
17,473
7,656

297,845 240,208
49,749 33,174
30,544 25,267
6,950 (63,106)

250,466
4,802
1,167(11,085)

241,015 222,215
5,328
8,103
1,625
4,528
4,835 (10,625)(38.41)
17.47

6.86

6.07

(55.57)(40.04)

5.00

5.00

5.00

---

---

---

229.19239.64196.02

97.99

98.31

62.48

6 .Post-share exchange outlook(1) Trade name, line of business, headquarters location, and corporate representative
There will be no change in the trade name, line of business, headquarters location, or
corporate representative of both companies from the corresponding entries found in ‘4
Summary of parties involved in the share exchange’.
(2) Amount of capital of Tokyu
Tokyu's increase of capital and capital reserve has not been determined yet.
7. Effects on business performance
TDS is currently an affiliate of Tokyu to which the equity method is applicable.
However, as a result of Tokyu’s tender offer for TDS shares, TDS may become aconsolidated subsidiary in the fiscal year ending in March 2005 and, following theshare exchange, it will become a consolidated subsidiary of Tokyu, in the fiscal year
ending March 2006 and later. Accordingly, at such time, TDS's operating revenues
and operating income and others will be reflected in the consolidated businessperformance of Tokyu.

We believe that TDS's transition to become a wholly-owned subsidiary of Tokyu willfurther improve TDS’s business results. In addition, it will reinforce Tokyu’s retail
operations as its third core business after transportation and real estate operations, andwe expect it to rapidly facilitate concentrated and effective use of business resourcesand enhance the consolidated business performance of Tokyu.