Bain Capital said it will give up its pursuit of Fuji Soft, ending a monthslong bidding war with KKR to take the Japanese software company private.
The Boston-based private equity firm said in a statement on Monday that it won’t implement a tender offer for Fuji Soft after deciding not to increase the price. The move came after KKR raised its bid to ?9,850 ($65) per share in early February.
Shares of Fuji Soft, which had traded above KKR’s latest offer, dropped 0.3% to ?9,843 at 1:13 p.m. in Tokyo. The Yokohama-based tech firm has a market capitalization of about $4.4 billion.
The public battle underscored how quickly the private equity landscape has been changing in Japan, as competition heats up for assets in the country’s booming buyout market. Until now, global funds have preferred a low-key approach to dealmaking, mindful of the need to manage reputations built up steadily after years of being seen locally as vultures.
KKR had initially announced a tender offer in August to take Fuji Soft private, before Bain publicized a rival bid that forced the New York-based firm to increase its proposed price. Bain then raised its bid and dropped a requirement that it would only commence its tender offer with the support of Fuji Soft’s board, setting the stage for a hostile takeover, which is rare in Japan.
KKR then boosted its bid a second time in early February, saying it wanted to accelerate the privatization as uncertainty hovered over the deal. Bain’s proposal had put the transaction into limbo, especially as KKR already owns more than one-third of shares in Fuji Soft following an earlier tender offer and had the ability to block any rival takeovers.
Fuji Soft’s board has continued to support KKR’s proposal, saying it would be completed earlier and allow shareholders to cash out more quickly.
The tussle over Fuji Soft was rooted in the software company’s trove of human resources and real estate. The company owns a large portfolio of offices around Tokyo, where rising property prices provide the potential to unlock value by selling the assets.
Fuji Soft’s human capital — it has more than 10,000 employees in a business segment that offers information technology solutions for clients — is also attractive in a country facing a shortage of skilled labor around technology and engineering, according to investors.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.