Bain to Make $4.2 Billion Hostile Bid for Fuji Soft Against KKR

(Bloomberg) — Bain Capital plans to make a bid to buy shares of Japanese software company Fuji Soft Inc. without support from the company’s board of directors, kicking off a rare hostile bid in Japan against KKR & Co. 

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. Bain said it had “strong concerns” about Fuji Soft’s process to go private, and decided to proceed with its bid without the support of the company’s board.

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).

Bain plans to launch its bid at the same price on the condition that KKR’s ongoing tender offer for Fuji Soft — which is set to end tomorrow — fails. KKR already owns about a third of the company and is seeking to acquire enough shares to take the company private through its tender offer. 

Shares of Fuji Soft rose 1.1% to ¥9,756 on Wednesday morning in Tokyo. 

Hostile bids in Japan by private equity firms are rare. Even aggressive global funds have preferred a low-key approach in the country, mindful of the need to manage 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. 

The Fuji Soft saga started in August, when KKR offered to take the company private at ¥8,800 per share, valuing it at almost $4 billion. 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. 

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