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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Hitachi Kokusai Electric Inc    6756   JP3294600006

HITACHI KOKUSAI ELECTRIC INC

(6756)
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Bain defends Asatsu-DK bid as shareholder opposition grows

10/18/2017 | 06:11am EST
Logo of Bain Capital is screened at a news conference in Tokyo, Japan

HONG KONG/TOKYO (Reuters) - Bain Capital defended its $1.35 billion (£1 billion) offer to buy Asatsu-DK Inc (>> Asatsu-DK Inc) on Wednesday as shareholder opposition to the deal grew, saying the offer is "fully priced".

HONG KONG/TOKYO (Reuters) - Bain Capital defended its $1.35 billion (£1 billion) offer to buy Asatsu-DK Inc (>> Asatsu-DK Inc) on Wednesday as shareholder opposition to the deal grew, saying the offer is "fully priced".

Hong Kong-based activist hedge fund Oasis Management Company and other shareholders of Japan's third-largest advertising agency have said the offer is too low.

Asatsu-DK's two largest shareholders, global advertising giant WPP (>> WPP Group) and London-based fund manager Silchester International, have also said the offer significantly undervalues the company and they have called for competing bids.

The dispute between Bain and the shareholders marks the second time in about a month that a private equity firm squared off against shareholders for a Japanese asset, after U.S. hedge fund Elliott Management Corp put pressure on KKR & Co LP (>> KKR & Co. L.P.) to raise its bid for Hitachi Kokusai Electric (>> Hitachi Kokusai Electric Inc) in a deal valuing the firm at some $2.3 billion.

Asatsu-DK shares closed at 3,790 yen on Wednesday, 3.6 percent higher than Bain's offer price of 3,660 yen. Asatsu-DK shares have risen 19 percent since Bain announced its offer to buy Asatsu-DK.

"The offer is fully priced and provides shareholders with an opportunity to realise attractive value," Bain said in a statement on Wednesday.

Asatsu-DK spokeswoman Kaori Nakajima reiterated on Wednesday the company's statement issued on Monday that Bain's proposal is the most feasible among other choices and best serves shareholders.

Oasis and other investors disagree.

"We believe there is lot of potential growth in earnings by ADK through expanding its digital strategy and animation. Bain is attempting to buy a steady, consistent platform with large untapped potential," Seth Fischer, chief investment officer of Oasis, said on Tuesday.

"We, as long-term shareholders, want to get paid a fair price for our shares, which we think is at a premium to the current market price."

WPP owns about 24 percent of Asatsu-DK, while Silchester International has about 17 percent. Asatsu-DK's Nakajima said Oasis's holding is less than 5 percent.

Bain has said it will cancel the buyout unless it secures at least 50.1 percent of Asatsu-DK. Typically, private equity firms adopt a higher threshold of about 67 percent.

The tender offer, which started on Oct. 3, will remain open until Nov. 15.

(Reporting by Elzio Barreto in HONG KONG and Junko Fujita in TOKYO: Editing by Neil Fullick)

By Elzio Barreto and Junko Fujita


© Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
BEST INC. -7.67% 2.65 Delayed Quote.-48.38%
LINE CORPORATION 0.19% 5380 End-of-day quote.0.56%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.03% 104.551 Delayed Quote.-4.48%
WPP PLC 0.47% 734.4 Delayed Quote.-31.14%
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Managers
NameTitle
Kaichiro Sakuma Executive President & Representative Director
Shinichi Inagaki Director
Kazuhiro Inada Director
Hidemi Moue Director
Shinobu Umino Director
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