What is management buyout (MBO)?

A management buyout (MBO) generally refers to a transaction in which a tender offeror is an officer of the target company (including a tender offeror conducts a tender offer at the request of an officer of the target company and has common interests with the officer). (Rule 441 of Securities Listing Regulations)
It is currently planned that TK Co., Ltd. (100% subsidiary of TK Holdings Co., Ltd. owned by KKR) will become a tender offeror (the “Tender Offeror”) and acquire the Company’s share certificates (common shares, share options, and ADRs) through tender offer (the “Tender Offer”). After participating in the Tender Offer, our President and CEO, Takashi Eto, intends to reinvest a portion of the proceeds he receives from the Tender Offer into TK Holdings Co., Ltd. For further details, please refer to the Tokyo Stock Exchange(TES) release.(Also posted on this page)

When does the Tender Offer start?

According to Tender Offeror, the Tender Offer aims to commence around the end of July 2025.
The detailed schedule will be promptly announced once they are determined.

What is the Tender Offer price？

Common Shares: JPY 3,300 per share
7th Stock Acquisition Rights: JPY 193,400 per unit
Company Shares related to the American Depositary Share: JPY 3,300 per share

What are the procedures to apply for the Tender Offer?

For detailed application procedures, please refer to the tender offer registration statement that will be separately disclosed at the time of the commencement of the Tender Offer.
Shareholders are advised to consult with their tax advisors or other professional experts concerning the tax treatment from tendering their shares in the Tender Offer.

Who is the Tender Offer Agent?

According to Tender Offeror, Tender Offer Agent is planned to be Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., and sub-agent is planned to be Mitsubishi UFJ eSmart Securities Co., Ltd.
Additionally, shareholders who held our shares as of the end of March 2024 will receive a letter from the Tender Offeror. For more detailed tender procedures, please also refer to the tender procedure guides enclosed in the letter from Mitsubishi UFJ Morgan Stanley Securities and Mitsubishi UFJ e-Smart Securities.

Where should I open my account in order to tender my shares？

It is necessary to open an account with either Mitsubishi UFJ Morgan Stanley Securities or Mitsubishi UFJ e-Smart Securities. If you already have a trading account with either of these securities companies and hold our shares in that account, you may apply for the TOB using one of the following methods:
o For Mitsubishi UFJ Morgan Stanley Securities: Please receive the “Tender Offer Application Form” and “Tender Offer Prospectus” at your branch office. Fill in the required information in the application form and submit it either in person or by post. If you have already received the Tender Offer Prospectus, you may apply by phone instead of submitting the document in writing.
o For Mitsubishi UFJ e-Smart Securities: You can apply for the TOB by concluding an electronic delivery agreement via the website.
If you already have a trading account with either of the above-mentioned securities companies but hold our shares with a different securities firm, you will need to request a transfer of your shares by initiating a transfer procedure at your current securities company.
If you do not have a trading account with either of the above-mentioned securities companies, you must first open an account. After that, you will need to initiate a transfer procedure for your shares at the securities company where they are currently held.
The TOB period is expected to be 21 business days. Since it usually takes around 10 to 14 business days from account opening to the completion of the application, we expect that you will be able to apply without issue by promptly initiating the account opening process after the public announcement. Please note that, as Mitsubishi UFJ e-Smart Securities is an online brokerage, the required time for procedures may be relatively shorter due to the absence of in-person process.

What are the minimum and maximum number of shares to be purchased under Tender Offer?

There is no maximum limit. The minimum threshold is 50.10%.

How long is the Tender Offer period?

It is expected to be 21 business days.

Will there be any potential changes in the Tender Offer price or Tender Offer period?

Tender Offer details are matters to be determined by Tender Offeror (TK Co., Ltd.), and therefore, we are not in a position to provide specific comments. In case of any changes, we will notify in a timely manner.

I am not certain whether I should tender my shares or not.

We have resolved to express our opinion in favor of the Tender Offer and to recommend that shareholders tender their shares in the Tender Offer.

What happens if I do not tender my shares while the Tender Offer process is completed?

Those shares that are not tendered during the Tender Offer process will be exchanged for cash through the squeeze-out process.

What is squeeze-out？

A squeeze-out is a series of procedures implemented after the Tender Offer is completed in order to acquire all the outstanding shares so that the Tender Offeror becomes the sole shareholder of the Company. It is intended to acquire those shares that were not tendered during the Tender Offer process, and shareholders are not required to any specific action.

Are there any risks that Tender Offer does not start?

According to the Tender Offeror, such risks are limited at this time.

What happens if the Tender Offer ends unsuccessful?

In the event that the Tender Offer is not successful, we will notify further details in due course.

Why dividends are not distributed for fiscal year ending March 2025?

Tender Offer price has been determined comprehensively on the condition that the Tender Offer will be successfully completed. As such, the Company has resolved not to pay year-end dividends for the fiscal year ending March 2025.

What are the processes for determining final MBO partner?

In selecting the candidates, the Company initially compiled a list of more than 50 potential candidates, conducted interviews with promising candidates, narrowed down the list based on certain selection criteria such as investment track record in the healthcare sector which is the pillar of the Company’s growth strategy, in Japanese manufacturing industry, and in global companies, etc., and as a result, selected three investment funds.
KKR was selected as the final candidate after several rounds of discussions and the submission of proposals and based on the determination that KKR’s proposal was superior in terms of both contents of the proposal and proposed price. Please refer to TSE release for detailed processes.

According to the TSE release, the circumstances that would permit the withdrawal of the Tender Offer are “a material change in the business or assets of the Company or subsidiaries or other circumstances that would seriously impede the achievement of the purpose of a tender offer”. What kind of situations specifically fall under this definition?

It refers to certain events prescribed by law, such as material corporate decisions by the company or its subsidiaries regarding certain matters, or the occurrence of material facts concerning the company or its subsidiaries.