Bain Capital is proposing a $2bn tender offer for nearly half of Fuji Soft’s shares, even without the Japanese IT firm’s board approval, if a competing second-round bid by rival buyout firm KKR fails, according to a report by Reuters.
Bain’s latest offer of JPY9,600 per share exceeds KKR’s by 1.6%.
KKR, backed by Fuji Soft’s board, had already secured a 33.9% stake in the first round of bidding, despite Bain’s earlier higher offer. However, Bain has the support of Fuji Soft founder and major shareholder Hiroshi Nozawa, along with his family, who together hold an 18.6% stake.
Bain has reportedly expressed “strong concerns and distrust” over Fuji Soft’s rejection of its proposal, claiming the decision harms minority shareholders and lacks justification given the higher offer price. Although Bain initially indicated it would proceed only with board approval, it now plans to launch the bid independently, likely in late January or February, using internal funding.
The firm also raised questions about the independence of the special committee evaluating Fuji Soft’s bids, noting that five of its six members were appointed at an extraordinary shareholder meeting organised by 3D Investment Partners – a KKR ally.
A Bain-Nozawa alliance could control two-thirds of the company, tipping the scales in Bain’s favour, the report says.
Meanwhile, Fuji Soft’s board has reaffirmed its support for KKR’s second-round bid, despite the lower offer price of JPY9,451 per share. The board argues that KKR’s stake, already at 34%, ensures stability, while Bain’s higher offer could delay the resolution of ownership disputes with the potential for two major shareholders to impair decision-making.
It also noted that Bain’s additional 1.6% offer was insufficient to justify the time required to finalise the tender.
Bain countered by emphasising that its pursuit of a controlling stake would mitigate any risk of governance deadlock. It also highlighted the strategic value of Fuji Soft’s IT services business, a rare growth area in Japan’s shrinking domestic market.
Fuji Soft’s shares closed 1.3% higher on Wednesday at 9,771 yen, reflecting investor speculation about the escalating bidding war, which began in August.
