U.S. private equity firm KKR has strategically increased its offer for Japan’s Fuji Soft by 4%, intensifying the ongoing competitive bidding situation with Bain Capital over the IT company valued at $4 billion.
KKR’s decision to raise its offer price to 9,850 yen per share from the earlier 9,451 yen surpasses Bain’s previous offer of 9,600 yen made in December. This move reflects the firm commitment and strategy to outpace competitors in a high-stakes investment environment. Despite Bain’s efforts to maintain its bid, which were rare due to Japan’s corporate norms, the firm expressed significant distrust towards Fuji Soft’s board decision, arguing that rejecting the proposal was against minority shareholders’ interests.
Fuji Soft’s stock closed nearly 2% higher at 9,990 yen, indicating market speculation that Bain might return with an improved offer. According to Travis Lundy of Quiddity Advisors, the presence of such competition benefits the market and minority shareholders by ensuring a more accurate share valuation. “If Bain were not there, the market would not have been trading around 9,800 yen recently,” Lundy remarked.
KKR currently owns 33.97% of Fuji Soft shares following an initial bid stage, where activist investors 3D Investment Partners and Farallon Capital tendered their shares. Nevertheless, KKR has not yet secured a majority stake, with Bain’s superior offer raising the stakes.
The ongoing scenario is driven by substantial interests from Fuji Soft’s founding family supporting Bain, who have yet to launch a tender offer. Bain prefers to await the outcome of KKR’s bidding strategy before advancing. The dynamics between these investment titans highlight a broader trend of heightened activity among global equity firms targeting Japanese companies with untapped potential or governance issues.
KKR began its acquisition attempt in August, initially proposing 8,800 yen per share, which was subsequently countered by Bain’s 9,450 yen offer in October. KKR responded by slightly raising its bid to 9,451 yen, maintaining this stance until the recent enhancement to 9,850 yen, which sharply contrasts Bain’s later 9,600 yen proposal.
KKR’s increased offer for Fuji Soft highlights a fierce and strategic battle between two investment giants in the global market. As both KKR and Bain continue their pursuit, the stakes remain high, with significant implications for Fuji Soft’s future governance and market performance.
