Bain makes binding offer for Fuji Soft, outbidding KKR by 7%

BAIN Capital made a binding takeover proposal for Fuji Soft as it seeks to outmaneuver private equity rival KKR, which has offered a lower price for the Japanese software developer.

Bain is proposing to pay 9,450 yen (S$82.70) a share for the company, it said in a statement Friday (Oct 12), which compares with KKR’s 8,800 yen-per-share offer. Bain plans to start its tender bid in late October if Fuji Soft expresses support for the move, it said.

A weaker yen and regulators’ emphasis on shareholder value are ramping up M&A activity in Japan. Earlier this year, Fuji Soft said it agreed to a buyout by KKR, even though it had received a higher-priced non-binding offer from Bain, because it judged KKR’s offer was more certain to occur.

Bain’s bid is designed to take the Japanese company private. Fuji Soft’s founding family, including founder Hiroshi Nozawa, are expected to retain less than one third of the company’s total voting rights if the tender offer succeeds.

To help secure the deal, KKR last month moved up the start of its bid to Sep 5 from an initial plan of mid-September in the wake of Bain’s non-binding proposal. KKR also amended its takeover approach, splitting the process into two stages with the first round running from Sep 5 through Oct 21.

Yokohama-based Fuji Soft contracts software from Fujitsu, a supplier of computer systems for some of Japan’s biggest banks such as Mizuho Financial Group and government agencies. The software company’s been fielding demands from Singapore-based 3D Investment Partners, its largest shareholder according to Bloomberg-compiled data, to consider steps such as taking the company private. BLOOMBERG