Notice Regarding Commencement of Tender Offer for Stock in SOTSU CO., LTD.(Securities Code:3711) 539.7 KB

October 9, 2019

Name of listed company: BANDAI NAMCO Holdings Inc. Name of representative:

Mitsuaki Taguchi,

President and Representative Director

(Code Number: 7832 TSE 1st section)

Contact: Yuji Asako,

Director, Division General

Manager of the Corporate Planning Division

(TEL: [phone])

Notice Regarding Commencement of Tender Offer for Stock in SOTSU CO., LTD. (Securities Code:3711)

BANDAI NAMCO Holdings Inc. (the "Company" or the "Tender Offeror") announces that it adopted a resolution at its board of directors meeting held today as below to acquire common stock in SOTSU CO., LTD. (the Tokyo Stock Exchange, Inc., the "Tokyo Stock Exchange", JASDAQ Standard Market, the "JASDAQ Standard Market," securities code:3711; the "Target Company" and the "Target Company's Common Stock") through a tender offer (the "Tender Offer") under the Financial Instruments and Exchange Act (Act No. 25 of 1948, including subsequent amendments; "Act").

1. Purpose, Etc. of Purchase, Etc.

1. Overview of the Tender Offer

As of the date hereof, the Tender Offeror holds 3,340,000 shares of common stock of the Target Company (the "Target Company's Common Stock") (shareholding ratio: 22.79% (Note)) which are listed on JASDAQ Standard Market (the "JASDAQ Standard Market"), and the Target Company is an affiliate of the Company to which the equity-method is applicable. The Tender Offeror resolved at the meeting of its board of directors held on October 9, 2019, to implement the Tender Offer as part of transactions (the "Transactions") for the purpose of acquiring all of the Target Company's Common Stock (excluding the Target Company's Common Stock held by the Tender Offeror and the treasury shares held

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by the Target Company; hereinafter the same shall apply) and making the Target Company a wholly-owned subsidiary of the Tender Offeror.

(Note) "Shareholding ratio" means the ratio to 14,654,255 shares which is equivalent to the total number of issued shares of the Target Company as of August 31, 2019 (i.e., 15,000,000 shares) set forth in the "Summary of Consolidated Financial Results for the Year Ended August 31, 2019 (Based on Japanese GAAP)" (the "Financial Results"), as announced by the Target Company on October 9, 2019, less the number of the treasury shares held by the Target Company as of the same date (i.e., 345,745 shares) (rounded to two decimal places; hereinafter the same shall apply unless otherwise provided with respect to the statement of the shareholding ratio).

To make the Tender Offer, the Tender Offeror, on October 9, 2019, entered into a tender offer application agreement (the "Application Agreement") with (i) Mr. Yuji Nasu, who is the founder of the Target Company and its largest shareholder among the major shareholders of the Target Company (number of shares owned: 4,290,000 shares; shareholding ratio: 29.27%; Mr. Nasu is hereinafter referred to as the "Founder Shareholder") and (ii) NUSCO Co., Ltd., which is the asset management company of the Founder Shareholder and the third largest shareholder among the major shareholders of the Target Company (number of shares owned: 2,920,000 shares; shareholding ratio: 19.93%; NUSCO Co., Ltd. is hereinafter referred to as the "Asset Management Company," and the Founder Shareholder and the Asset Management Company are collectively called "Prospective Tendering Shareholders") to tender all of the Prospective Tendered Shares they respectively own (total number of shares: 7,210,000 shares; shareholding ratio: 49.20%; "Prospective Tendered Shares") in the Tender Offer. For details of the Application Agreement, please refer to "(3) Matters concerning Material Agreement related to the Tender Offer" below.

In the Tender Offer, the Tender Offeror has set 7,210,000 shares (shareholding ratio: 49.20%), which is equal to the number of the Prospective Tendered Shares, as the minimum number of the shares to be purchased, and, if the total number of the share certificates, etc., the sale of which is proposed in response to the Tender Offer ("Tendered Share Certificates, Etc."), is less than such minimum number, the Tender Offeror will not purchase any of Tendered Share Certificates, Etc. However, the Tender Offeror intends to obtain all of the Target Company's Common Stock in the Tender Offer, and, therefore, has not set the maximum number of the shares to be purchased, and, if the total number of Tendered Share

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Certificates, Etc., is equal to or more than the minimum number, the Tender Offeror will purchase all of Tendered Share Certificates, Etc.

As the Tender Offeror aims to make the Target Company its wholly-owned subsidiary, if the Tender Offeror fails to acquire all of the Target Company's Common Stock through the Tender Offer, after completion of the Tender Offer, the Tender Offeror plans to acquire all of the Target Company's Common Stock through implementing a series of procedures to make the Tender Offeror the sole shareholder of the Target Company as stated in "(5) Policy for Organizational Restructuring, Etc. after the Tender Offer (Matters Relating to So-called'Two-step Acquisition')" below.

According to the "Announcement concerning Implementation of the Tender Offer of Our Shares by BANDAI NAMCO Holdings Inc. and Recommendation for Tender Offer" (the "Target Company's Press Release") made by the Target Company as of October 9, 2019, the Target Company resolved at its board of directors meeting held on October 9, 2019, to the effect that the Target Company would express an opinion to support the Tender Offer and recommend that the shareholders of the Target Company tender their shares through the Tender Offer.

For details of the resolution of the board of directors of the Target Company as set forth above, please refer to the Target Company's Press Release and "e. Unanimous Approval by All Non-interested Directors and No Dissenting Opinion of All Non-interested Statutory Auditors at the Target Company," of "(4) Measures to Ensure the Fairness of the Tender Offer Such as Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest" below.

1. Background, Purpose and Decision-Making Process Leading to the Decision to Implement the Tender Offer, and Management Policy After the Tender Offer

1. Background, Purpose and Decision-Making Process Leading to the Decision to Implement the Tender Offer
   The Tender Offeror was founded in September 2005 when BANDAI CO., LTD.
   ("BANDAI") and NAMCO LIMITED (the current BANDAI NAMCO Entertainment Inc.) performed a management integration through a joint share transfer and became a company listed on the First Section of the Tokyo Stock Exchange in the same month. The Tender Offeror is a pure holding company which controls a group of companies (consisting of the Tender Offeror, 106 subsidiaries (as of March 31, 2019), and 12 affiliated companies (as of

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the same date); "BANDAI NAMCO Group"), with widely recognized IP, such as the Mobile Suit Gundam series ("powerful IP." IP refers to intellectual property rights relating to characters, etc.; hereinafter the same) as their core strength, operating a variety of entertainment-related businesses, including toys, plastic models, network content, home video game, amusement machines, visual and music content, amusement facilities, among others.

The BANDAI NAMCO Group is organized into group companies that constitute five business units―Toys and Hobby (the business related to manufacturing and marketing of toys, plastic models, confectionery and foods, capsule toys, cards, apparel, sundries, stationery, prizes, and other products); Network Entertainment (the business related to planning, developing, and distributing of network content; and planning and sales of home video games software), Real Entertainment (the business related to planning, developing, manufacturing, and marketing of amusement machines, etc.; and planning and operation of amusement and other facilities), Visual and Music Production (the business related to planning, production, and marketing of visual and music content and package software; and planning and operation of events and live performances), and IP Creation (the business related to planning and production of animation; management and administration of copyrights)―and affiliated business companies that provide support for each business unit. Each unit conducts business centering on the "IP axis strategy," through which IP (including those relating to characters, among other), which are the BANDAI NAMCO Group's greatest strength, are distributed as optimal products and services to optimal regions at optimal times by making the most of the unique world view and features of such characters, among others.

The BANDAI NAMCO Group's mission is to continue to offer "Dreams, Fun and Inspiration," through entertainment, to people throughout the world, and its vision is to become "The Leading Innovator in Global Entertainment". From a mid to long term perspective, under such mission and vision, the Tender Offeror aims to be the world's most inspiring entertainment group for fans, as a group of companies and employees that have the unique ideas and creativity to meet expectations, not only in terms of its business scale but also in the quality and appeal of its products and services. Under the IP axis strategy, the Tender Offeror has accelerated creation of new IP and proceeded with strategies by unifying the efforts of all companies in the BANDAI NAMCO group in each region. Under the Mid-term Plan which started from April 2018, with the mid-term vision of "CHANGE for the NEXT: Empower, Gain Momentum, and Accelerate Evolution," the Tender Offeror aims to evolve the IP axis strategy further and achieve penetration and

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expansion in global markets. Moreover, in promoting specific strategies, the Tender Offeror aims to be a group that continues to change to progress to the next stage rather than adhering to previous business models and established ideas in the light of considering the changes in the global entertainment market environment and consumer preferences, the emergence of new competitors, and other factors.

According to the Target Company's Press Release, the Target Company was established as Toyo Agency Co., Ltd. in December 1962 and has been carrying out the planning and sales of team goods, an agent business of licensing Copyrights (It means the right to allow others to commercialize products and characters that are components of the products or to utilize them in other ways based on copyrights, trademark rights, etc.; hereinafter the same), and other management work on behalf of the Japanese baseball team Yomiuri Giants after being designated as its exclusive agency (currently, a designated agency). After the Target Company had changed its company name to Sotsu Agency Co., Ltd in August 1977, it expanded its business by producing its first TV animation work and starting a Copyrights business utilizing the Copyrights of the TV animation characters in October 1977. The Target Company was registered with the Japan Securities Dealers Association in April 2003, and, in December 2004, the Target Company cancelled its registration with the Japan Securities Dealers Association and listed its stock on the JASDAQ Market managed by JASDAQ Securities Exchange, Inc. (the "JASDAQ Securities Exchange"). After the Target Company changed its company name to the current one, SOTSU CO., LTD., in April 2007, the stock of the Target Company was listed on the JASDAQ Market operated by Osaka Securities Exchange Co., Ltd. (the "Osaka Securities Exchange") in April 2010, as a result of the merger of the JASDAQ Securities Exchange and the Osaka Securities Exchange. The stock was then listed on the JASDAQ Standard Market managed by the Tokyo Stock Exchange in July 2013, following the market integration between the Tokyo Securities Exchange and the Osaka Securities Exchange. As of the date hereof, The Target Company Group consists of the Target Company and four consolidated subsidiaries, whose main businesses are a media business (business associated with the planning and production of animated programs, sales promotion of goods related to IP of animations, promotional campaigns, planning and proposing events, etc.), a rights business (business associated with the licensing of the commercialization of IP of animations, management of Copyrights, etc.), and a sports business (business associated with the planning and sales of goods of a professional baseball team, planning and operation of attractions, etc. related to sporting events of a professional baseball team, advertising through sports media, etc.). By operating under the management philosophy of "being an entertainment company that

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