Bain & Company to make $4.2 billion hostile bid for Fuji Software from KKR

(Bloomberg) — Bain Capital plans to make a bid for shares of Japanese software company Fuji Software Corp. without the support of the company’s board of directors, launching a rare hostile bid for KKR & Co. in Japan.

The Boston-based investment firm disclosed the plans in a presentation on Wednesday, after FujiSoft’s board rejected a higher offer from Bain & Co. in favor of going private with KKR. Bain said it had “strong concerns” about Fuji Software’s move to take it private and decided to proceed with the acquisition without the support of the company’s board.

Last week, Bain said it planned to acquire Fuji Software for 9,600 yen per share, 1.6% higher than KKR’s offer of 9,451 yen, valuing the company at about 647 billion yen ($4.2 billion).

Bain plans to launch a takeover at the same price if KKR’s ongoing tender offer for Fuji Software, due to close tomorrow, fails. KKR already owns about a third of the company and is seeking to acquire enough shares to take the company private through a tender offer.

Fuji Software shares rose 1.1% to 9,756 yen in Tokyo on Wednesday morning.

Hostile takeovers by private equity firms are rare in Japan. Even activist global funds prefer a low-key approach in the country, given the need to manage a reputation that has been steadily built after years of being viewed as a vulture locally. The latest developments underscore how quickly the private equity landscape is changing in the country’s booming buyout market.

The Fuji Software saga began in August, when KKR offered to take the company private at 8,800 yen per share, valuing it at nearly $4 billion. A few weeks later, Bain & Company announced a public bid that was 7 percent higher. The deal appeared to be in limbo until late November, when KKR raised its offer price to 1 yen per share over Bain’s, winning support from Fuji Software’s board and rejecting Bain’s first rival acquisition offer.

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