Nitori had said it would pay 5,500 yen per share to buy all of Shimachu in a bid that values the target company at 214 billion yen ($2.04 billion). DCM was conducting its own offer at 4,200 yen per share, which is due to expire on Monday.
Nitori will launch its offer as early as mid-November, the Nikkei said.
Nitori and Shimachu could not immediately be reached for comment. DCM declined to comment.
Nitori is the latest Japanese company to propose a takeover without prior agreement of the target's management, a trend that is gathering pace as companies increasingly seek growth from mergers.
The move is also driven by a government push for better corporate governance, which puts management under pressure to give shareholders higher returns.
Nitori initially flagged a possible bid to buy Shimachu on the day an investment group backed by a prominent activist investor, Yoshiaki Murakami, revealed that it owned 8.38% of Shimachu, adding that DCM's offer might be cheap.
(Reporting by Takashi Umekawa; Editing by Chris Reese and Sam Holmes)