Bain Capital and LY Corporation raised their offer for Kakaku.com to ¥3,384 a share, valuing the Japanese digital-platform group at about ¥670bn ($4.1bn) and extending their lead over a rival deal from EQT. The revised terms transform competition into direct pricing, shareholder consensus and transaction certainty.
This proposal is legally binding but not yet a live tender. Bain Capital and LY said the takeover vehicle will buy Kakaku.com shares for cash and complete the squeeze, subject to the company's board supporting the transaction, its special committee recommending it and the completion of regulatory approval required or considered possible. The tender offer could start in September if those conditions are met.
At ¥3,384 a share, the offer is 12.8% above EQT's ¥3,000 offer and 4.7% above the ¥3,232 price put forward by Bain and LY in May. It could also rise to ¥3,500 if bidders reach a no-tender agreement with KDDI, Kakaku.com's second-largest shareholder. That high figure would put the bid at 16.7% above EQT's targets.
The revised price remains just below Kakaku.com's closing price of ¥3,390 on June 30, indicating that investors had priced in the possibility of a strong bid. Compared to the untouched share price of ¥2,121 on April 22, however, the ¥3,384 offer represents a 59.55% premium. The gap between the market price and the two offers leaves room for shareholders to expect further movement before control is settled.
Kakaku.com has withdrawn its previous recommendation that shareholders accept EQT's offer and adopt a neutral stance while continuing negotiations with both parties. EQT, which launched its tender offer in May with the support of Kakaku.com's board and special committee, extended its offer until July 16. Its original structure also included agreements with Digital Garage and KDDI, which together hold 38.1% of Kakaku.com.
Bain and LY received more support from shareholders. Oasis Management and related funds, which own 19.14% of Kakaku.com, have agreed to tender their shares if the offering begins on agreed terms. The consortium intends to approach KDDI with a revised proposal, while Digital Garage has previously described its Kakaku.com as a core strategic investment linked to the EQT structure.
The financial package gives the competitive proposition a large banking footprint. Bain Capital Asia Fund VI provided the equity commitment, while LY guaranteed the available cash. Sumitomo Mitsui Banking Corporation, Mizuho Bank, MUFG Bank, Sumitomo Mitsui Trust Bank, Kiraboshi Bank, Aozora Bank and SBI Shinsei Bank provided letters of credit. Japan's Goldman Sachs is advising LY from a financial perspective, and SBI Securities is expected to act as the tendering agent.
The decision now depends on more than just the subject matter. The Kakaku.com board must weigh the high value against the certainty of the existing EQT process, the conditions attached to the Bain-LY proposal and the future ownership model of services including Kakaku.com, Tabelog and Kyujin Box. The next phase will determine whether the improved bid generates a completed transaction or triggers another round of price increases.
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