Bain Capital Raises Offer for Fuji Soft, Outbids KKR

Bain Capital, a prominent U.S. private equity firm, has increased its offer for Japan’s Fuji Soft to ¥9,600 ($62.88) per share, surpassing KKR’s latest bid by 1.6%, according to an announcement on Wednesday. This escalates the ongoing battle between Bain and rival KKR for control of the $4 billion software company.

The competition began in August when KKR launched a ¥8,800 per share tender offer, later raising it to ¥9,451 to counter Bain’s earlier bid of ¥9,450. Bain’s latest move reflects the intense rivalry, driven by Japan’s rising appeal as a hub for mergers and acquisitions (M&A).

SUPPORT FROM FUJI SOFT MANAGEMENT

Despite Bain’s revised bid, Fuji Soft’s management has maintained its support for KKR, citing strategic concerns. KKR structured its offer into two stages, first acquiring a 34% stake—enough to block a potential Bain-led privatization—before proceeding toward a majority stake.

Last month, Fuji Soft rejected Bain’s bid, arguing that KKR’s partial acquisition rendered Bain’s offer unviable. Management also demanded that Bain destroy the sensitive company information obtained during due diligence and refrain from further proposals.

Bain, however, has criticized these actions, claiming they disregard shareholder interests. The firm reiterated its intent to use the information gathered to proceed with its tender offer as soon as possible, emphasizing its commitment to shareholder value.

JAPAN’S GROWING M&A MARKET

This bidding war highlights Japan’s growing status as a hotspot for private equity deals. Inbound M&A activity in the country reached a record $81 billion in the first ten months of 2023, a 17-fold increase from the same period last year, according to LSEG data.

The outcome of the Fuji Soft deal could set a precedent for future investments in Japan’s evolving corporate landscape, where private equity interest continues to rise.