(Bloomberg) -- Bain Capital plans to offer to buy shares of Fuji Soft Inc. without support from the Japanese company’s board, setting the stage for a rare hostile bid in its battle with KKR & Co. for the software developer.
The Boston-based investment firm disclosed the plans in a presentation Wednesday after Fuji Soft’s board rejected a higher offer from Bain in favor of going private with KKR — extending a months-long back-and-forth to win control of the $4.3 billion company. Bain said it had “strong concerns” about Fuji Soft’s process to go private, prompting its decision to bid without the company’s support.
Takeovers in Japan by private equity firms without the consent of the target company are rare. Even aggressive global funds have preferred a low-key approach, mindful of the need to manage better reputations built up steadily after years of being seen locally as vultures. The latest development underscores how fast the private equity landscape is changing in the country’s booming buyout market.
Last week, Bain said it planned to pay ¥9,600 a share for Fuji Soft — 1.6% higher than KKR’s offer of ¥9,451 and valuing the company at around ¥647 billion ($4.2 billion). The offer then was contingent upon winning support from Fuji Soft’s board.
Fuji Soft said Tuesday it supported KKR’s offer because it would be completed earlier, allowing shareholders to cash out more quickly.
KKR declined to comment.
Bain plans to launch its bid at the same price it sought earlier if KKR’s ongoing tender offer — which is set to end on Thursday — fails or is withdrawn. It expects to start the offer in late January or early February. KKR already owns about a third of Fuji Soft, and is seeking to acquire enough shares to take the company private.
Shares of Fuji Soft are trading above what both firms are seeking to pay. The stock rose 1.3% to ¥9,771 at the close in Tokyo on Wednesday.
The Fuji Soft saga started in August, when KKR offered to take the company private at ¥8,800 per share. Weeks later, Bain announced a rival public bid that was 7% higher. The deal appeared to be in limbo until late November, when KKR raised its offer price to 1 yen per share higher than Bain’s, winning the support of Fuji Soft’s board and the rejection of Bain’s first rival bid. Bain then made its revised proposal last week.
Bain said it has secured backing from Fuji Soft’s founding shareholders, who hold about 18.6% of the company. Its tender offer seeks to acquire between 33.91% and 49.89% of Fuji Soft, not including the founding shares.
--With assistance from Takako Taniguchi.
(Updates throughout with additional details.)
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