KKR Raises Second Tender Offer Price for FUJI SOFT to 9,850 Yen Per Share

Rhea-AI Summary

KKR has announced an increase in its Second Tender Offer price for FUJI SOFT shares to 9,850 yen per share, up from 9,451 yen. The tender offer period has been extended to February 19, 2025. The increased price represents various premiums, including 33.29% over the August 7, 2024 closing price.

The decision aims to resolve uncertainty around FUJI SOFT's privatization, considering the company's elevated share price which has remained above both KKR's previous offer and Bain Capital's announced price of 9,600 yen. KKR will provide financial compensation to First Tender Offer participants within the previously announced make-whole amount of 651 yen per share.

The new offer price also includes adjusted amounts for share options: 1,277,000 yen per 5th Series Share Option, 1,139,600 yen per 6th Series Share Option, and 333,100 yen per 7th Series Share Option.

Positive

• Increased tender offer price by 4.2% to 9,850 yen per share
• Significant premiums offered: 33.29% over August 7 price, up to 51.42% over 6-month average
• Financial compensation planned for First Tender Offer participants (up to 651 yen per share)

Negative

• Extended tender offer period indicates potential difficulties in securing shareholder approval
• Competing bid from Bain Capital creates uncertainty in acquisition process

Insights

Investment Banking Analyst

KKR's strategic move to increase its tender offer price for FUJI SOFT to 9,850 yen per share demonstrates the intensifying competition in Japan's private equity landscape. This 4.2% increase from the previous offer represents a calculated response to market dynamics and competitive pressures.

The decision carries several notable implications:

• The premium structure, particularly the 51.42% premium over the 6-month average price, indicates KKR's strong commitment to completing this transaction and preventing potential competitive bids.
• The make-whole compensation mechanism for First Tender Offer participants (up to 651 yen per share) shows sophisticated deal structuring to maintain fairness and shareholder goodwill.
• The timing of the increased offer, coupled with the seven-day extension, suggests KKR is leveraging market psychology to create momentum and encourage shareholder participation.

This transaction highlights the evolving dynamics in Japan's M&A market, where foreign private equity firms are increasingly willing to engage in competitive situations and pay fuller prices for quality assets. The emphasis on stakeholder considerations, particularly employees and customers, aligns with Japan's corporate culture and could facilitate a smoother transition post-privatization.

Increased tender offer price aims to resolve uncertainty around FUJI SOFT’s privatization and enable KKR to focus on value creation efforts alongside the Company post privatization

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, January 9, 2025 and January 24, 2025) (the “Amendment Statement”).

The Offeror has decided to increase the tender offer price for the Second Tender Offer to 9,850 yen per share from 9,451 yen per share, and 1,277,000 yen per 5^th Series Share Option, 1,139,600 yen per 6^th Series Share Option, 333,100 yen per 7^th Series Share Option. The tender offer period has also been extended by seven business days to February 19, 2025.

Rationale for Increased Tender Offer Price

The increased tender offer price considers FUJI SOFT’s elevated share price, which has stayed above the previous Second Tender Offer price of 9,451 yen per share and the announced tender offer price of 9,600 yen per share by Bain Capital, which has yet to commence its tender offer. It also considers the fact that FUJI SOFT’s share price has not declined as expected despite there being no competing tender offer for an extended period. Given that any further prolonged uncertainty around FUJI SOFT’s privatization will hurt the Company and its stakeholders, including employees and customers, KKR has decided to raise the Second Tender Offer price to minimize the uncertainty and accelerate FUJI SOFT’s privatization, and turn its focus to value creation efforts alongside the Company.

The increased Second Tender Offer Price of 9,850 yen represents a premium of:

• 0.51% on the closing price of the Company Shares on the Prime Market of the Tokyo Stock Exchange on February 3, 2025 (9,800 yen), the business day immediately preceding the submission of the Amendment Statement;
• 33.29% on the closing price on August 7, 2024 (7,390 yen), the business day immediately preceding the announcement of the implementation of the First Tender Offer by the Offeror;
• 38.15% on the simple average of the closing price of the Company shares for a period of 1 year until August 7, 2024 (7,130 yen);
• 44.92% of the simple average of the closing price of the Company shares for a period of 3 months until August 7, 2024 (6,797 yen); and
• 51.42% of the simple average of the closing price of the Company shares for a period of 6 months until August 7, 2024 (6,505 yen).

The Offeror believes these premiums are satisfactory for shareholders and share option holders. Given the increased price, the Offeror believes that the prospects of the Second Tender Offer succeeding have increased sufficiently such that it does not need to launch a new tender offer after the Second Tender Offer.

The Offeror plans to continue to offer the opportunity for financial compensation to within the range of the previously announced make-whole amount (651 yen per share) to the shareholders and share option holders who tendered into the First Tender Offer (“Former Shareholders”), and while details regarding the timeframe and method continue to be under consideration, the Offeror plans to notify all Former Shareholders eligible for this compensation as soon as the details are finalized. Additionally, the Offeror plans to begin contacting Former Shareholders eligible for this compensation within a month after the Second Tender Offer is successfully completed. At the same time, the Offeror will post contact information for inquiries regarding this compensation on the KKR website (https://www.kkr.com/jp/ja), and any Former Shareholders eligible for this compensation should use this contact information for inquiries if they have not heard from the Offeror.

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/20250204314392/en/

For more information, please contact:

Media Contact

KKR Asia Pacific

Wei Jun Ong

+65 6922 5813

WeiJun.Ong@kkr.com

Source: KKR

FAQ

What is KKR's new tender offer price for FUJI SOFT shares?

KKR has increased its Second Tender Offer price to 9,850 yen per share, up from the previous 9,451 yen per share.

When does KKR's extended tender offer for FUJI SOFT expire?

The tender offer period has been extended by seven business days to February 19, 2025.

How much premium does KKR's new offer represent over FUJI SOFT's previous trading price?

The new offer represents a 33.29% premium over the August 7, 2024 closing price, and up to 51.42% premium over the 6-month average price.

What compensation will KKR provide to FUJI SOFT shareholders who participated in the First Tender Offer?

KKR plans to offer financial compensation within the range of 651 yen per share to shareholders who participated in the First Tender Offer.

How does KKR's new offer compare to Bain Capital's announced price for FUJI SOFT?

KKR's new offer of 9,850 yen per share is higher than Bain Capital's announced price of 9,600 yen per share.