Bain Capital has increased its offer for Japanese software firm Fuji Soft to 9,600 yen per share, a 1.6% increase designed to surpass a competing bid from KKR. This latest development intensifies the high-stakes competition between the two private equity giants for the $4 billion company.
The bidding war began in August with KKR’s initial offer of 8,800 yen per share. Bain subsequently countered with a 9,450 yen per share bid, prompting KKR to raise its offer to 9,451 yen. Bain’s newest bid of 9,600 yen represents the latest escalation in this ongoing acquisition battle. This competitive landscape highlights Japan’s increasing attractiveness as a prime location for private equity investments, driven by surging demand and a corresponding increase in deal activity.
A key condition of Bain’s bid is securing company support, which it has yet to obtain. In contrast, KKR structured its tender offer in two phases. The first phase allowed KKR to acquire approximately 34% of Fuji Soft, sufficient to block a privatization attempt by Bain. The second phase targeted acquiring a majority stake. Following the completion of KKR’s first phase, Fuji Soft’s management endorsed KKR’s bid and rejected Bain’s proposal, citing KKR’s acquired stake as a significant obstacle to Bain’s success.
Furthermore, Fuji Soft’s management requested Bain to withdraw from making further offers and to dispose of confidential company information obtained during due diligence. Bain countered, arguing that this demand disregards shareholder interests and expressed its intent to utilize the information to proceed with its tender offer as quickly as possible. This contentious exchange underscores the complex dynamics at play in this high-profile acquisition.
Data from LSEG reveals a significant surge in inbound mergers and acquisitions in Japan. In the first ten months of 2023, Japan recorded a record $81 billion in inbound M&A activity, representing a seventeen-fold increase compared to the same period in the previous year. This significant increase underlines Japan’s growing appeal as a target for foreign investment.
In conclusion, the battle for control of Fuji Soft continues to intensify, with Bain Capital’s latest price increase putting further pressure on KKR. The outcome of this acquisition will likely have significant implications for the Japanese software market and underscores the growing importance of Japan as a key destination for private equity investment. The ongoing competition between Bain and KKR exemplifies the fierce competition for lucrative deals in this dynamic market.
