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 ¡ª it has more than 10,000 employees in a business segment that offers information technology solutions for clients ¡ª is also attractive in a country facing a shortage of skilled labor around technology and engineering, according to investors.
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