KKR Extends Second Tender Offer for FUJI SOFT to Early February

Rhea-AI Summary

KKR has announced an extension of its Second Tender Offer period for FUJI SOFT shares from January 24, 2025, to February 7, 2025. The tender offer price remains unchanged at 9,451 yen per common share. The extension comes amid uncertainty regarding Bain Capital's potential unsolicited tender offer, which they indicated would commence 'in late January or early February 2025.'

The extension aims to provide shareholders with the option to tender into KKR's existing offer if Bain Capital's alternative offer doesn't materialize. KKR notes that Bain Capital's condition requiring KKR's tender offer to be withdrawn is unnecessary, as multiple tender offers can run simultaneously. KKR also raises concerns about Bain Capital's potential breach of confidentiality agreements regarding the use of retained confidential information.

Positive

• Maintained tender offer price at 9,451 yen per share
• Extended tender offer period provides shareholders more time to decide

Negative

• Facing competitive pressure from potential Bain Capital unsolicited tender offer
• Uncertainty around tender offer outcome due to competing bid possibility

Insights

M&A and Private Equity Specialist

The extension of KKR's tender offer for FUJI SOFT reveals a sophisticated chess game between two private equity giants. The maintained offer price of 9,451 yen per share indicates KKR's confidence in their valuation, while the timing extension serves multiple strategic purposes.

Three critical aspects deserve attention:

• Strategic Positioning: KKR's extension to February 7 effectively creates a deadline for Bain Capital to launch their competing offer. This move pressures Bain while giving FUJI SOFT shareholders a clear timeline for decision-making.
• Legal Implications: The controversy over Bain's potential use of retained confidential information raises significant governance concerns. Standard M&A practice allows information retention for compliance purposes, not for launching competing bids. This could expose Bain to legal challenges and potentially delay or complicate their competing offer.
• Shareholder Dynamics: The extension provides FUJI SOFT shareholders with optionality - they can either accept KKR's certain offer or wait for Bain's potential competing bid. This flexibility potentially enhances KKR's position as the 'safe harbor' option.

The situation highlights the increasing complexity of cross-border M&A transactions in Japan, where traditional business practices intersect with aggressive private equity tactics. KKR's measured response - maintaining price stability while extending the timeline - demonstrates sophisticated market navigation in a contested situation.

Extension by 10 business days allows shareholders to tender into KKR’s tender offer if alternative tender offer does not commence

TOKYO--(BUSINESS WIRE)-- KKR, a leading global investment firm, announced today that in connection with the Second Tender Offer in its two-stage tender offer scheme (the “Tender Offer”) for the common shares and share options of FUJI SOFT INCORPORATED (“FUJI SOFT” or the “Company”; TSE stock code 9749) through FK Co., Ltd. (the “Offeror” or “FK Co.”), an entity owned by investment funds managed by KKR, the Offeror has submitted an amendment statement to the Tender Offer Registration Statement that was submitted on November 20, 2024 (including the matters amended in the amendment statements to the Tender Offer Registration Statement submitted on December 19, 2024 and January 9, 2025) (the “Amendment Statement”).

The Amendment Statement was submitted due to the Offeror’s decision to extend the end date of the tender offer period for the Second Tender Offer from January 24, 2025 to February 7, 2025. The tender offer price per common share will remain at 9,451 yen, and no change to the price is being considered.

Rationale for Extension to Early February

The extension of the tender offer takes into account the uncertainty faced by shareholders around the possibility of an unsolicited tender offer, which Bain Capital disclosed on January 7, 2025 that it intends to commence “in late January or early February 2025 following discussions and negotiations with the Target Company’s shareholders, including FK Co., Ltd. and preparation of disclosure documents,” and is intended to provide shareholders with the option to tender into the existing and only available tender offer, if an alternative tender offer is not commenced.

Bain Capital disclosed in its press release dated November 1, 2024 that “all of the conditions precedent other than approval from the Board of Directors of FUJI SOFT have been satisfied, and Bain Capital is prepared to launch the tender offer as soon as approval from FUJI SOFT is obtained,” and in its press release dated December 18, 2024 (“December 18 Press”), that “Bain Capital has decided to waive the approval of the Target Company as a condition precedent to the commencement of the tender offer”.

The extension timeline also factors in statements by Bain Capital on December 18, 2024 and January 7, 2025 that it intends to launch its unsolicited tender offer by “early February,” which can be understood to be by February 7, 2025, the last full business day in “early February” (nigatsu joujun). Therefore, if Bain Capital intends to launch its unsolicited tender offer, it is expected to launch no later than February 7, 2025.

In its press release dated December 11 and December 18, 2024, Bain Capital added “the Second Tender Offer by FK Co., Ltd. being withdrawn or unsuccessful” as a condition precedent for its unsolicited tender offer. This condition is unnecessary as multiple tender offers can be conducted in parallel and Bain Capital has also not provided any explanation for why it cannot commence its tender offer while FK Co., Ltd.’s Second Tender Offer is ongoing, especially given the unsolicited nature of Bain Capital’s tender offer.

Additional Notes on Bain Capital’s Breach of Confidentiality Agreement

Additionally, in its press release on January 7, 2025, Bain Capital stated that it had fulfilled its obligation to destroy confidential information as requested by FUJI SOFT, and that it had also requested its advisers, lenders and other parties to whom it had disclosed confidential information to destroy such information. It stated that it would continue to conduct its tender offer based on the confidential information that it was permitted to retain based on its confidentiality agreement with FUJI SOFT. It is important to note that the rationale for why some confidential information is permitted to be retained in regular M&A practice is so that undue burden is not imposed on the recipients of information, including in instances where retention is required for regulatory compliance reasons, or where (due to digitalization) the destruction of confidential information is not practicable. Accordingly, such “retained” confidential information is not permitted for use in a tender offer, particularly one that is unsolicited and non-consensual (were it permissible for confidential information to be continued to be used even after its destruction, there would be no point in entering a confidentiality agreement). Therefore, if Bain Capital continues to use or disclose such Confidential Information, such actions would amount to breach of its confidentiality agreement. The Offeror believes that Bain Capital remains in breach of its confidentiality agreement and continues to request that the Board of Directors of FUJI SOFT take legal action, including seeking an injunction against Bain Capital for its unauthorized use of confidential information.

For details on the Amendment Statement, please refer to the release issued by the Offeror today titled “(Amendment) Notice Regarding Amendment to “Notice Regarding the Commencement of Tender Offer for the Shares of FUJI SOFT INCORPORATED (Securities Code: 9749) by FK Co., Ltd.” Following Submission of Amendment Statement to the Tender Offer Registration Statement by FK Co., Ltd.” (the “Amendment Release”).

This press release should be read in conjunction with the Amendment Release.

The purpose of this press release is to publicly announce an extension to the tender offer period for the Second Tender Offer and it has not been prepared for the purpose of soliciting an offer to sell or purchase in the Tender Offer. When making an application to tender, please be sure to read the relevant Tender Offer Explanatory Statement for the Tender Offer and make your own decision as a shareholder or share option holder. This press release does not constitute, either in whole or in part, a solicitation of an offer to sell or purchase any securities, and the existence of this press release (or any part thereof) or its distribution shall not be construed as a basis for any agreement regarding the Tender Offer, nor shall it be relied upon in concluding an agreement regarding the Tender Offer.

The Tender Offer will be conducted in compliance with the procedures and information disclosure standards set forth in Japanese law, and those procedures and standards are not always the same as the procedures and information disclosure standards in the U.S. In particular, neither sections 13(e) or 14(d) of the U.S. Securities Exchange Act of 1934 (as amended; the same shall apply hereinafter) or the rules under these sections apply to the Tender Offer; and therefore the Tender Offer will not be conducted in accordance with those procedures and standards.

Unless otherwise specified, all procedures relating to the Tender Offer are to be conducted entirely in Japanese. All or a part of the documentation relating to the Tender Offer will be prepared in English; however, if there is any discrepancy between the English-language documents and the Japanese-language documents, the Japanese-language documents shall prevail.

This press release includes statements that fall under “forward-looking statements” as defined in section 27A of the U.S. Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934. Due to known or unknown risks, uncertainties or other factors, actual results may differ materially from the predictions indicated by the statements that are implicitly or explicitly forward-looking statements. Neither the Offeror nor any of its affiliates guarantee that the predictions indicated by the statements that are implicitly or expressly forward-looking statements will materialize. The forward-looking statements in this press release were prepared based on information held by the Offeror as of today, and the Offeror and its affiliates shall not be obliged to amend or revise such statements to reflect future events or circumstances, except as required by laws and regulations.

The Offeror, its financial advisors and the Tender Offer agent (and their respective affiliates) may purchase the common shares and share options of FUJI SOFT, by means other than the Tender Offer, or conduct an act aimed at such purchases, for their own account or for their client’s accounts, in the scope of their ordinary business and to the extent permitted under financial instrument exchange-related laws and regulations, and any other applicable laws and regulations in Japan, in accordance with the requirements of Rule 14e-5(b) of the U.S. Securities Exchange Act of 1934. Such purchases may be conducted at the market price through market transactions or at a price determined by negotiations off-market. In the event that information regarding such purchases is disclosed in Japan, such information will also be disclosed on the English website of the person conducting such purchases (or by any other method of public disclosure).

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250124758131/en/

For more information, please contact:

Media Contact

KKR Asia Pacific

Wei Jun Ong

+65 6922 5813

WeiJun.Ong@kkr.com

Source: KKR

FAQ

When is the new deadline for KKR's tender offer for FUJI SOFT?

KKR has extended the tender offer deadline from January 24, 2025, to February 7, 2025.

What is the price per share in KKR's tender offer for FUJI SOFT?

The tender offer price remains unchanged at 9,451 yen per common share.

Why did KKR extend its tender offer period for FUJI SOFT?

KKR extended the offer to provide shareholders more time to decide, particularly given the uncertainty around Bain Capital's potential competing tender offer.

Can both KKR and Bain Capital's tender offers for FUJI SOFT run simultaneously?

Yes, according to KKR, multiple tender offers can be conducted in parallel, making Bain Capital's condition about KKR's offer withdrawal unnecessary.