KKR accelerates $4 billion bid for Fuji as Bain circles

(Times of Update) — KKR & Co. is moving up the start of its takeover bid for Fuji Soft Inc. to Sept. 5, reducing the likelihood of a bidding war with private-equity rival Bain Capital.

Times of Update’s most read articles

KKR is accelerating its proposed acquisition of Fuji Soft, which is expected to fetch up to 600 billion yen ($4 billion), according to people familiar with the matter who spoke on condition of anonymity because the discussions are private. That would help move the deal forward before Bain formally submits a proposal to buy Fuji Soft for 5% more than KKR’s offer of 8,800 yen per share, or about 9,200 to 9,300 yen per share.

Bain’s non-binding offer at a higher price raised hopes of a rare Japanese bidding war, sending Fuji Soft’s stock above the offer price, with shares jumping 7.4 percent to a record high of ¥9,630 on Wednesday in Tokyo.

Bain said it plans to submit a legally binding proposal as early as October to launch a potential go-private buyout in November. KKR’s new accelerated buyout schedule increases the chances that its acquisition will close before then.

Private equity firms are eyeing Japan for investment opportunities, even though global tech protectionism makes it hard to target as many. Last month, Japan designated chipmaking equipment as a key national security sector, requiring advance notice and vetting of foreign investors seeking to take a stake.

But a weaker yen and regulators’ emphasis on shareholder value and governance are now encouraging companies to test the country’s willingness to embrace mergers and acquisitions, most recently with Alimentation Couche-Tard Inc.’s proposed takeover of Seven & i Holdings Co.

Fuji Soft has contracted with Fujitsu Ltd., a supplier of computer systems to some of Japan’s largest banks, such as Mizuho Financial Group Inc., and government agencies. The software company has received requests from 3D Investment Partners, its largest shareholder according to data compiled by Singapore-based Times of Update, to consider measures such as taking the company private.

Bain said in a statement earlier this week that it “highly values ​​the commercial benefits, business potential and potential value of the target business.”

Fuji Soft said it agreed to a KKR buyout, even though Bain also made a higher offer, because it believed KKR’s offer was legally binding and more certain to go through. It also said Bain’s offer had not received consent from 3D Investment Partners and there were concerns about financing the deal.

The story continues

–With assistance from Lisa Du and Yuji Okada.

(Updated with context from Bain’s statement)

Times of Update Businessweek’s Most Read Articles

©2024 Times of Update LP