KKR and Bain Capital Engage in Bidding War for Fuji Soft

U.S. investment firm KKR has extended the first stage of its tender offer to take Fuji Soft, a Japanese IT services company, private by 10 working days. This decision follows a competing bid from Bain Capital, which proposed to buy all shares of Fuji Soft at a higher price, creating a competitive scenario between two prominent players in the global private equity space.

KKR initially offered 8,800 yen (approximately $58.71) per share in August, but Bain's subsequent bid of 9,450 yen per share prompted KKR to revise its strategy. KKR introduced a two-stage tender process that allows shareholders to participate either in the initial tender or in a later one, both at the original 8,800 yen per share.

The first stage, which was originally set to expire on October 21, has now been extended to November 5. KKR has garnered support from major shareholders 3D Investment Partners and Farallon Capital, who collectively own about 32.7% of Fuji Soft's shares and have committed to tendering their shares in this first stage.

Fuji Soft's board has expressed its backing for KKR's initial tender but also indicated that it would be reasonable for shareholders to wait for the outcome of Bain's higher bid. The board has not made a decision regarding either KKR's offer or Bain's proposal.

In a letter last week, Fuji Soft's founder Hiroshi Nozawa urged the company to withdraw its recommendation for KKR's offer, emphasizing that Bain's higher price aligns more closely with the interests of shareholders. Nozawa, who, along with his family, holds 18.5% of the company's shares, questioned the necessity of the proposed privatization, suggesting that it was driven more by investor interests than by the company's management.