BANDAI NAMCO HOLDINGS INC. March 9, 2016
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
BANDAI NAMCO Holdings Inc. ("Tender Offeror") announces that it adopted a resolution at its Board of Directors meeting held today to acquire common shares in WiZ Co., Ltd. (Tokyo Stock Exchange, Inc., "Tokyo Stock Exchange", JASDAQ Standard section, "JASDAQ," securities code: 7835; "Target Company" and "Target Company's Shares") through a tender offer under the Financial Instruments and Exchange Act (Act No. 25 of 1948, including subsequent amendments; "Act").
1. Purpose of the Tender Offer
Outline of Both Tender Offers
At a meeting of its Board of Directors held today, the Tender Offeror passed a resolution to acquire all of the Target Company's Shares listed on JASDAQ to make the Target Company a wholly-owned subsidiary of the Tender Offeror through a series of transactions detailed below ("Transaction"). As of today, the Tender Offeror does not own any of the Target Company's Shares.
As the initial step in the Transaction, the Tender Offeror makes a tender offer ("First Tender Offer" or "Tender Offer") mainly for the purpose of purchasing all of the Target Company's Shares owned by Mr. Akihiro Yokoi ("Founder Shareholder"), who is the founder and President & CEO of the Target Company and its largest shareholder among major shareholders (number of Target Company's Shares he owns, "number of shares owned":
1,336,600 shares; shareholding ratio (*): 43.37%), Mr. Akira Shimazaki, who is Director【】 and the second
largest shareholder of the Target Company (number of shares owned: 174,000 shares; shareholding ratio: 5.65%), Ms. Mayumi Yokoi, who is the Founder Shareholder's wife and the third largest shareholder of the Target Company (number of shares owned: 105,000 shares; shareholding ratio: 3.41%), and Mr. Kenji Yokoi, who is the Founder Shareholder's brother and Director and the fourth largest shareholder of the Target Company (number of shares owned: 80,000 shares; shareholding ratio: 2.60%) (Founder Shareholder, Mr. Akira Shimazaki, Ms. Mayumi Yokoi, and Mr. Kenji Yokoi are collectively called "Prospective Tendering Shareholders"), a total of 1,695,600 Target Company's Shares ("Prospective Tendered Shares") (shareholding ratio: 55.02%) at the market price discounted by a certain rate.
To make the First Tender Offer, the Tender Offeror has entered into a tender offer application agreement ("Application Agreement") with the Prospective Tendering Shareholders on tendering all of the Prospective Tendered Shares they respectively own in the First Tender Offer, as of today. For details of the Application Agreement, refer to "(4) Matters relating to material agreement between the Tender Offeror and shareholders of the
Target Company concerning application for the Tender Offer, etc." below.
(*Note) The shareholding ratio is the ratio of shares held by shareholders to the total number of issued shares, 3,081,600 shares, as of November 30, 2015 ("total number of issued shares of the Target Company"), which was stated in the quarterly report for the second quarter of the 30th term filed by the Target Company on January 13, 2016 ("Target Company's 30th Term 2Q Report"). (The ratio is rounded to the second decimal place.) The same applies hereinafter. Also note that the Target Company did not own treasury shares as of that date.
For the First Tender Offer, the Company has set the minimum number of shares to be purchased at 1,695,600 shares, which is equivalent to the number of the Prospective Tendered Shares. Provided the total number of shares tendered in the First Tender Offer ("tendered shares") is less than the minimum number of shares to be purchased (1,695,600 shares), the Tender Offeror will not purchase any of the tendered shares. As the Tender Offeror plans to make the second tender offer at 560 yen as the tender offer price, as detailed below, in the event that the First Tender Offer is completed, it does not expect Target Company's Shares other than Prospective Tendered Shares tendered by the Prospective Tendering Shareholders to be tendered in the First Tender Offer. However, to provide a greater opportunity for the shareholders of the Target Company who wish to tender their shares in the First Tender Offer, the Tender Offeror does not set the maximum number of shares to be purchased for the First Tender Offer. Accordingly, provided the total number of tendered shares is not less than the minimum number of shares to be purchased (1,695,600 shares) in the First Tender Offer, the Tender Offeror will purchase all the tendered shares.
The Tender Offeror adopted at its today's Board of Directors meeting a resolution to commence the second tender offer ("Second Tender Offer"; with First Tender Offer, collectively called "Both Tender Offers"), as the second step in the Transaction, to purchase the Target Company's Shares owned by general shareholders, except the Prospective Tendering Shareholders, promptly after the First Tender Offer and its settlement are completed. In the event that the First Tender Offer is completed, provided any event that falls under the condition for withdrawal of the First Tender Offer does not occur (for such details, refer to "2) Existence of conditions for withdrawal, etc. of the tender offer, details thereof, and method of disclosing withdrawal etc." of "(9) Other conditions and methods relating to the tender offer" in "2. Outline of the Tender Offer" below), the Tender Offeror plans to commence the Second Tender Offer on April 15, 2016. The purpose of the Second Tender Offer is to purchase all of the Target Company's Shares, except those to be purchased by the Tender Offeror in the First Tender Offer (supposedly, the Target Company's Shares other than the Prospective Tendered Shares; The same applies hereinafter). The tender offer price per share of the Target Company's Shares in the Second Tender Offer ("Second Tender Offer Price") is planned to be set at 560 yen, 415 yen (or 286.2%, rounded to the first decimal place; the same applies hereinafter) higher than 145 yen of the tender offer price per share of the Target Company's Shares in the First Tender Offer ("First Tender Offer Price" or "Tender Offer Price"). For details of the Second Tender Offer Price, refer to "(5) Matters relating to the Second Tender Offer" below.
Setting the minimum number of shares to be purchased for the Second Tender Offer makes completion of the Second Tender Offer uncertain, thus the minimum number is not set for the Second Tender Offer to secure an opportunity to sell shares for the shareholders of the Target Company who wish to sell their shares at the Second Tender Offer Price. Accordingly, provided the Second Tender Offer is completed, the Tender Offeror will purchase all the tendered shares in the Second Tender Offer.
According to "Notice of Opinion on Tender Offer for Company Shares etc. by BANDAI NAMCO Holdings Inc." released today by the Target Company ("Target Company's Press Release"), the Target Company decided at
today's Board of Directors meeting to endorse the First Tender Offer, and to reserve its opinion about the reasonableness of the First Tender Offer Price and finds it appropriate to leave a decision on whether or not to tender own shares in the First Tender Offer up to shareholders given that: (i) the First Tender Offer Price was agreed and determined through negotiations between the Prospective Tendering Shareholders and the Tender Offeror, and in the First Tender Offer only the Prospective Tendering Shareholders are expected to tender their shares while general shareholders are not; and (ii) in behalf of general shareholders, provided the First Tender Offer is completed, promptly after its settlement is completed, the Second Tender Offer will be made with the Second Tender Offer Price set higher than the First Tender Offer Price. In the event that the First Tender Offer is completed, promptly after its settlement, the Tender Offeror will make the Second Tender Offer with the Second Tender Offer Price set higher than the First Tender Offer Price. For this reason, the Board of Directors of the Target Company also decided today that in the event of the Second Tender Offer it should endorse and recommend to the shareholders of the Target Company to tender their shares in the Second Tender Offer. For details of the decision- making process at the Target Company, refer to "4) Approval of all Directors with no beneficial interest and consent of all Audit & Supervisory Board Members" in "(6) Measures to ensure fairness of Both Tender Offers, including those to ensure fairness of tender offer prices and to avoid conflicts of interest" below.
The Tender Offeror intends to make the Target Company its wholly-owned subsidiary through the Transaction. Therefore, if the Tender Offeror fails to purchase all of the Target Company's Shares through Both Tender Offers, it will take a series of procedures to make itself the sole shareholder of the Target Company subsequent to the Second Tender Offer. For more details, refer to "(7) Policy on reorganization etc. after Both Tender Offers (matters relating to the so-called two-stage purchase)" below.
Background leading up to the decision to conduct Both Tender Offers, purpose and decision-making process of Both Tender Offers, and management policy after Both Tender Offers
Background leading up to the decision to conduct Both Tender Offers, purpose and decision-making process of Both Tender Offers
The Tender Offeror was founded through a joint share transfer in September 2005 when Bandai Co., Ltd.
("Bandai" with Tender Offeror, collectively called "Tender Offeror and others") and NAMCO LIMITED (current BANDAI NAMCO Entertainment Inc.) performed a management integration and became a listed company on the First Section of the Tokyo Stock Exchange in the same month. It is a pure holding company which controls a group of companies, with IPs (IPs refer to intellectual property rights relating to characters, etc. The same applies hereinafter.) as their core strength, operating a variety of entertainment-related businesses, including toys, plastic models, network content, home video game software, arcade game machines, visual and music content, amusement facilities, etc. (consisting of the Tender Offeror, 94 subsidiaries, and 13 affiliated companies; "BANDAI NAMCO Group").
The BANDAI NAMCO Group is organized into three Strategic Business Units ("SBUs")―Toys and Hobby (the business related to manufacturing and marketing of toys, plastic models, confectionery and foods, vending machine capsule toys, cards, apparel, sundries, stationery, and other products. The same applies hereinafter.), Network Entertainment (the business related to planning, developing, and distributing of network content; planning, developing, and marketing home video game software, arcade game machines, and prizes for amusement machines; and planning and operating amusement and other facilities), and Visual and Music Production―and affiliated business companies that provide support for each SBU. Each SBU conducts business centering on the "IP Axis Strategy," through which IPs (including characters etc.),which are the BANDAI NAMCO Group's greatest strength, are distributed as products and services to optimized areas with the best timing by making the most of their worldview and unique features.
In its main strategies in the Mid-term Plan, which started in April 2015 under the vision of "NEXT STAGE: Empower, Gain Momentum, and Accelerate Evolution," the Group implements Business Strategies to "Accelerate Evolution in the IP Axis Strategy," Region Strategies to "Gain Momentum in Global Markets," and Functional Strategies to "Empower and Innovate its Business Model." In its Business Strategies to "Accelerate Evolution in the IP Axis Strategy," the Group not only cultivates Group IPs by such means as creating and obtaining IPs, but also expands into new IP businesses such as live events, expands target markets, and strengthens collaboration among its businesses. In its Region Strategies to "Gain Momentum in Global Markets," the Group not only maintains its pursuit of becoming No. 1 in each of its markets in Japan, but also proactively expands its business in Asia, where there is a promising outlook for future growth. Furthermore, in its Functional Strategies to "Empower and Innovate its Business Model," the Group creates and cultivates new next-generation IP businesses and promotes creating the foundations for implementing its IP Axis Strategy in global markets.
Meanwhile, according to the Target Company, the Target Company was established in September 1986 by the Founder Shareholder as a toy product planning company, under the company philosophy: "To convey a never- changing sense of playfulness to people in every generation without being bound by conventional values." In November 1996, the Target Company, jointly with Bandai, planned and developed "Tamagotchi," a handheld digital pet simulation game produced by the Target Company and distributed by Bandai, which became a worldwide hit product. After Tamagotchi, the Target Company, formerly just a planning company, expanded its business and embarked on full-scale toy product development and production operations. In collaboration with Bandai, the Target Company has since planned and developed product series such as "Digital Monsters," "Primopuel," "Crush Gear," and "Tamagotchi Revival" (produced by the Target Company and sold by Bandai). With solid sales of these consecutive products, it went public on Jasdaq Securities Exchange, Inc. (current JASDAQ) in June 2005.
As described above, the Target Company has an internal mechanism to rapidly plan, develop, and produce a product that is adaptable to the needs of the toy market in a consistent and penetrating fashion. It also has technologies and knowhow to create and embody things and articles, which did not exist in the market before such as "Tamagotchi," from scratch by capturing the needs of the times. Further, the Target Company has a structure to support a broad range of types of toys from electronic games to stuffed toys and figures, and believes that it can demonstrate its strength especially in planning and developing toy products.
Meanwhile, as measures to respond to a possible downward trend in revenue from its core products such as "Tamagotchi" and "Digital Monsters," given a business environment affected by a falling birth rate and subsequent diversification of playing activities including a growing number of smartphone applications and SNS games, the Target Company has advanced into other domains in addition to the toy industry since around 2006. Specifically, it has engaged in (i) planning, developing, and selling pet apparel; (ii) acquisition of ownership of game creation companies; (iii) acquisition of ownership of animation companies; (iv) toy car racing circuits operations (SLOT CARS JAPAN); (v) planning, developing, and selling private brand toys and goods; (vi) creating smartphone applications; and (vii) nursing-care robot business.
Despite some results being achieved such as increases in sales volume of certain private brand goods, the falling birth rate and the diversifying preferences in the environment surrounding the industry have progressed faster than the Target Company expected. To the Target Company whose strength is planning and development capabilities, the above measures (i) - (vii) in which weight is placed on marketing, sales, and advertising knowhow have turned out to be not so successful due to the Target Company's poor performance since 2007 and ensuing deterioration of its financial strength. As an example of its poor performance, the Target Company has recorded net loss every year since the fiscal year ended May 2007, except 2009 and 2012. For the preceding second quarter of the fiscal year
Namco Bandai Holdings Inc. issued this content on 09 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 06 April 2016 10:49:15 UTC
Original Document: http://www.bandainamco.co.jp/files/WizE9968BE5A78BE38397E383ACE382B9E383AAE383AAE383B.pdf
