U.S. private equity firm KKR has secured a 57.92% stake in Fuji Soft after the second stage of its tender offer bid, ending a fierce battle with rival Bain Capital to take the Japanese software developer private.
Both KKR and Bain had upped their bids multiple times, with KKR ultimately prevailing with its offer from earlier in February of 9,850 yen per share.
Bain had said on Monday that it would withdraw its takeover proposal.
Fuji Soft’s announcement on Thursday concludes a protracted and hard-fought battle between the two private equity powerhouses that spanned a bidding war, a rare hostile bid from Bain, and KKR’s threat of legal action against Bain.
The saga is emblematic of Japan’s hot deal-making market as global funds increasingly seek out investment targets seen to have 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, who criticised the privatisation process and said Bain’s higher bid was in the best interest of shareholders.
Nevertheless, Fuji Soft’s board supported KKR over Bain, prompting Bain to make a hostile bid in December and ramp up its criticism of the board, citing “strong concerns and distrust” over its handling of the privatisation process.
After Bain refused the board’s demand it dispose of the confidential information it had compiled in the due diligence for its bid, KKR requested Fuji Soft take legal action against Bain.
Fuji Soft had been subject to an activist investor campaign from Singapore-based 3D Investment Partners to dispose of its real estate assets and conduct share buybacks.
3D also began soliciting take-private proposals from private equity funds in 2023 and called on Fuji Soft to appoint its candidate as an external auditor to oversee the privatisation proposal review process.
Reuters
