By Anton Bridge and Kane Wu
TOKYO (Reuters) – Japan’s Fuji Soft said on Thursday that KKR now owns nearly 58% of the company after the second stage of a tender offer, ending a fierce battle with rival Bain Capital to take the software developer private.
The two private equity powerhouses had engaged in a protracted bidding war for Fuji Soft. KKR’s two-stage tender offer values the company at roughly $4.1 billion, according to Reuters calculations.
The saga also saw a rare hostile takeover attempt from Bain and KKR threaten legal action against Bain.
Upon completion, KKR’s Fuji Soft buyout would be the largest take-private deal in Japan so far this year, according to LSEG data.
KKR adopted an unconventional two-stage tender offer process. It increased its offer for the second stage after Bain’s interest emerged and then lifted it again as Bain signalled it was prepared to bid more. Ultimately, its 9,850 per share offer in the second stage prevailed.
Bain said on Monday that it would withdraw its takeover proposal but it was only on Thursday that it became clear that KKR had gained a stake of more than 53.2% – the minimum needed to squeeze out other investors.
KKR said in a separate statement on Thursday that an extraordinary general meeting on a squeeze-out was scheduled for late April.
The battle over Fuji Soft, a systems integration company which also has valuable real estate assets, highlights how Japan has become a hotbed of dealmaking. Global funds are increasingly seeking out Japanese investment targets viewed as having poor corporate governance or underutilised assets that could be reformed to increase shareholder value.
KKR first launched its bid in August last year but Bain countered higher in October and had the backing of Fuji Soft’s founder, Hiroshi Nozawa.
Nevertheless, Fuji Soft’s board supported KKR over Bain, prompting Bain to attempt a hostile bid in December and ramp up its criticism of the board.
After Bain refused to accede to the board’s demand that it dispose of the confidential information it had compiled in the due diligence for its bid, KKR asked Fuji Soft to take legal action against Bain.
Bain did not formally launch a tender offer, saying it was conditional first on attaining Fuji Soft’s support, and later, after the board came out in opposition to their bid, on KKR’s bid failing.
KKR said the company saw revenue hit a record high of 317.5 billion yen and operating income came in at 22 billion yen in the fiscal year ended in December. Both were gains of about 6%.
(Reporting by Anton Bridge in Tokyo and Kane Wu in Hong Kong, additional reporting by Mariko Katsumura; Editing by Chang-Ran Kim and Edwina Gibbs)
