IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> Board has maintained its recommendation of KKR’s first-stage tender offer. However, the recommendation was not unanimous, with four dissenting directors. </li>
<li>Bain’s likely next move is to waive the precondition and launch its offer. To bring KKR to the negotiating table, Bain will want to acquire as many shares as possible. </li>
<li>KKR’s first stage closes on 21 October. Success requires KKR to either work with Bain or match terms. As shares trade through Bain’s terms, there is little or no upside. </li>
</ul>


The Fuji Soft Inc (9749 JP) Board has maintained its recommendation of KKR’s first-stage tender offer. However, the recommendation was not unanimous, with four dissenting directors. 
Bain’s likely next move is to waive the precondition and launch its offer. To bring KKR to the negotiating table, Bain will want to acquire as many shares as possible. 
KKR’s first stage closes on 21 October. Success requires KKR to either work with Bain or match terms. As shares trade through Bain’s terms, there is little or no upside. 


Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside

<ul>
<li>
<a href="https://www.baincapital.co.jp/sites/default/files/2024-10/BC_PR11102024.pdf" target="_blank" rel="noopener">Bain’s pre-conditional tender offer</a> for <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> is JPY9,450, a 7.4% premium to KKR’s JPY8,800 offer. There is no minimum or maximum acceptance condition.</li>
<li>The preconditions relate to regulatory approval (Vietnam) and Board recommendation. Bain’s offer is designed to bring KKR to the negotiating table to find a solution to privatisation. </li>
<li>KKR can 1) do nothing, 2) work with Bain on a solution, or 3) engage in a price war to prevent the satisfaction of Bain’s Board recommendation precondition.</li>
</ul>



Bain’s pre-conditional tender offer for Fuji Soft Inc (9749 JP) is JPY9,450, a 7.4% premium to KKR’s JPY8,800 offer. There is no minimum or maximum acceptance condition.
The preconditions relate to regulatory approval (Vietnam) and Board recommendation. Bain’s offer is designed to bring KKR to the negotiating table to find a solution to privatisation. 
KKR can 1) do nothing, 2) work with Bain on a solution, or 3) engage in a price war to prevent the satisfaction of Bain’s Board recommendation precondition.


Fuji Soft (9749 JP): Bain’s Better Late than Never Competing Offer

<ul>
<li>The <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> Board has recommended KKR’s first tender offer (JPY8,800). The Board will announce its view on the second tender offer on launch. </li>
<li>The Board sounded out Bain’s progress on a binding proposal and 3D and Farallon's on their irrevocable. The absence of a Bain binding proposal immensely helped the Board’s decision.</li>
<li>Bain has likely left it too late. With a higher offer, Bain could force a recommendation change and hope KKR is shamed into cancelling 3D and Farallon's irrevocable. </li>
</ul>


The Fuji Soft Inc (9749 JP) Board has recommended KKR’s first tender offer (JPY8,800). The Board will announce its view on the second tender offer on launch. 
The Board sounded out Bain’s progress on a binding proposal and 3D and Farallon's on their irrevocable. The absence of a Bain binding proposal immensely helped the Board’s decision.
Bain has likely left it too late. With a higher offer, Bain could force a recommendation change and hope KKR is shamed into cancelling 3D and Farallon's irrevocable. 


Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers

<ul>
<li>KKR has rejigged its <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a> tender offer into a two-stage offer at an unchanged JPY8,800 price. The first stage has no minimum acceptance condition. </li>
<li>The first stage is designed to facilitate KKR’s acquisition of 3D and Farallon shares, which have tendered and will not withdraw their tenders without KKR's consent.</li>
<li>By securing 3D/Farallon’s shares, KKR has effectively blocked a Bain tender offer. Bain could launch a partial offer but it would be constrained by the tradeable share ratio criteria.   </li>
</ul>


KKR has rejigged its Fuji Soft Inc (9749 JP) tender offer into a two-stage offer at an unchanged JPY8,800 price. The first stage has no minimum acceptance condition. 
The first stage is designed to facilitate KKR’s acquisition of 3D and Farallon shares, which have tendered and will not withdraw their tenders without KKR's consent.
By securing 3D/Farallon’s shares, KKR has effectively blocked a Bain tender offer. Bain could launch a partial offer but it would be constrained by the tradeable share ratio criteria.   


Fuji Soft (9749 JP): Checkmate as KKR Switches to a Two-Stage Tender

<ul>
<li>In response to the potential Bain competing offer for <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, KKR has waived the precondition and launched its offer at unchanged JPY8,800 per share.</li>
<li>Bain’s due diligence ends on 20 September, and it aims to submit a binding proposal in October. This timeline will thwart KKR’s offer, which closes on 21 October.</li>
<li>KKR’s offer launch at unchanged terms is delaying the inevitable and will have to bump to succeed. A potential bidding war is likely to push the offer price to JPY10,500. </li>
</ul>


In response to the potential Bain competing offer for Fuji Soft Inc (9749 JP), KKR has waived the precondition and launched its offer at unchanged JPY8,800 per share.
Bain’s due diligence ends on 20 September, and it aims to submit a binding proposal in October. This timeline will thwart KKR’s offer, which closes on 21 October.
KKR’s offer launch at unchanged terms is delaying the inevitable and will have to bump to succeed. A potential bidding war is likely to push the offer price to JPY10,500. 


Fuji Soft (9749 JP): KKR's Cop-Out as It Launches at Unchanged Terms, Next Move Bain

Japan

DTS CORPORATION provides system, operation, and network engineering services for financial and communication-related companies.  The Company also provides product services and support services including system development, maintenance, and management.

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DTS Corp (9682 JP)

Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside

Bain will likely waive the precondition to launch its offer. KKR will need to match terms to succeed. Another higher offer from Bain is unlikely as...

Arun George

Fuji Soft (9749 JP): Bain’s Better Late than Never Competing Offer

Bain’s offer is designed to bring KKR to the negotiating table. This could be the end game, but KKR is equally likely to match terms, making it...

Arun George

Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers

Bain’s dithering on a binding competing proposal left the Board little choice but to recommend the binding proposal at hand - the KKR offer. Bain...

Arun George

Fuji Soft (9749 JP): Checkmate as KKR Switches to a Two-Stage Tender

KKR has deftly outmanoeuvred Bain by switching to a two-stage tender at an unchanged JPY8,800 and securing 3D/Farallon’s shares. Bain is likely to...

Arun George

Fuji Soft (9749 JP): KKR's Cop-Out as It Launches at Unchanged Terms, Next Move Bain

KKR’s offer launch at unchanged terms is delaying the inevitable. It will have to be bumped to succeed. A potential bidding war could push the...

Arun George

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