Shinko Electric Industries : Notice Concerning Expression of Opinion to Support Commencement of Tender Offer for Company Shares by JICC-04, Ltd. And Recommendation of Tender Thereto (385.2 KB)

Notice: This document is a translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

December 12, 2023

80, Oshimada-machi,Nagano-shi,381-2287 Japan

SHINKO ELECTRIC INDUSTRIES CO., LTD.

Stock exchange code: 6967, TSE Prime

Notice Concerning Expression of Opinion to Support Commencement of Tender Offer for Company Shares by JICC-04, Ltd. and Recommendation of Tender Thereto

The Company hereby announces that it resolved at its Board of Directors meeting held today to express its current opinion that, if commenced, it will express an opinion to support the tender offer (the "Tender Offer") for the Company's common shares (the "Company Shares") to be conducted by JICC-04, Ltd. (the "Tender Offeror") and recommend that its shareholders tender their shares in the Tender Offer, as below.

According to the Tender Offeror, because the procedures and steps required under domestic and foreign competition laws (at present, while it is believed that procedures will be required in Japan and foreign countries including China and South Korea and that procedures may be required in Vietnam, the decision on whether it is necessary to take procedures may change in the future depending on further confirmation of facts concerning the Company's business or assets and views expressed by relevant authorities; hereinafter the same) and foreign investment control laws and regulations (at present, while it is believed that procedures may be required in the U.S., the decision on whether it is necessary to take procedures may change in the future depending on further confirmation of facts concerning the Company's business or assets and views expressed by relevant authorities; hereinafter the same) will take time to complete, the Tender Offeror plans to commence the Tender Offer on the following date (the "Tender Offer Commencement Date"): a date that is (i) within 10 business days after the aforementioned procedures and steps are completed and other conditions precedent (Note 1) set out in the Master Transaction Agreement (as defined in "(I) Overview of Tender Offer" in "(2) Basis and Reasons for Opinion Regarding Tender Offer" in "3. Details, Basis, and Reasons for Opinion Regarding Tender Offer" below; hereinafter the same) (those conditions precedent, the "Tender Offer Conditions Precedent") (excluding those to be satisfied on the commencement date of the Tender Offer) are satisfied (or waived at the discretion of the Tender Offeror (Note 2)) (however, if a Counter Proposal (as defined in "(1) Master Transaction Agreement" in "4. Matters Concerning Material Agreements Related to Tender Offer" below; hereinafter the same) has been made as of such date, then the earlier of (a) the date on which 20 business days have elapsed since the date on which Fujitsu Limited("Fujitsu") makes a request to the Tender Offeror for consultation regarding changing the Tender Offer Price (as defined in "2. Purchase Price, Etc." below) and the Repurchase Price (as defined in "(I) Overview of Tender Offer" in "(2) Basis and Reasons for Opinion Regarding Tender Offer" in "3. Details, Basis, and Reasons for Opinion Regarding Tender Offer" below; hereinafter the same) or (b) the date on which

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Fujitsu covenants in writing that it will not accept the Counter Proposal) and (ii) determined by the Tender Offeror upon consultation with Fujitsu. As of today, the Tender Offeror aims, based on discussions with local law firms concerning such procedures, to commence the Tender Offer in or around late August 2024, but since it is difficult to accurately estimate the amount of time required for the procedures involving foreign competition authorities and authorities having jurisdiction over investment control laws and regulations, the detailed schedule for the Tender Offer will be promptly announced as soon as it is decided. Any changes to the expected timing of the commencement of the Tender Offer will be also announced promptly.

Note 1: Under the Master Transaction Agreement, the Tender Offer Conditions Precedent are stipulated as follows: (i) the permanent Special Committee (as defined in "(III) Process of and Reasons for Decision-Making by Company to Support Tender Offer" in "(2) Basis and Reasons for Opinion Regarding Tender Offer" in "3. Details, Basis, and Reasons for Opinion Regarding Tender Offer" below), established by the Company on June 17, 2022 based on the Corporate Governance Code published by the Tokyo Stock Exchange, has reported to the board of directors of the Company that it is appropriate for the board of directors of the Company to express its opinion in favor of the Transactions (as defined in "(I) Overview of Tender Offer" in "(2) Basis and Reasons for Opinion Regarding Tender Offer" in "3. Details, Basis, and Reasons for Opinion Regarding Tender Offer" below; hereinafter the same) and to recommend that the shareholders of the Company tender their shares in the Tender Offer, and the report has not been changed or withdrawn; (ii) the board of directors of the Company has adopted a resolution with the approval of all disinterested directors to express its opinion in favor of the Tender Offer and to recommend that the shareholders of the Company tender their shares in the Tender Offer, and that opinion has been publicly announced in accordance with laws and regulations and has not been changed or withdrawn, and no resolution in contradiction therewith has been passed; (iii) no judgment has been made or is likely to be made by any judicial or administrative agency that restricts or prohibits the Transactions; (iv) Fujitsu has performed and complied with, in all material respects, all of its obligations under the Master Transaction Agreement (Note 3), and there has been no breach of Fujitsu's representations and warranties under the Master Transaction Agreement (Note 4) that would have a material adverse effect (Note 5) (however, Fujitsu shall be given an opportunity to cure any nonperformance, noncompliance, or breach in advance, and if the nonperformance, noncompliance, or breach is cured within a reasonable period of time, the foregoing conditions shall be deemed satisfied); (v) the acquisition of Clearance (Note 6) has been completed; (vi) confirmation has been obtained in writing from the Company that, as of the business day immediately preceding the Tender Offer Commencement Date, there is no material fact regarding the business, etc. (excluding those publicly announced in accordance with Article 166, Paragraph 4 of the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended; the "Act") of the Company as provided for in Article 166, Paragraph 2 of the Act, except for matters relating to the Transactions including the Tender Offer to be announced on that date by the Company; (vii) no settlement failure event (Note 7) has occurred with regard to the financial institution that will become the lender in the borrowings (including mezzanine borrowings) by the Tender Offeror or its parent company for the purpose of financing the Transactions; (viii) the "Memorandum of Understanding Regarding Tender Offer" (the "MOU") between the Tender Offeror and the Company dated as of the date of execution of the Master Transaction Agreement

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remains in effect, and the Company has performed and complied with, in all material respects, all of its obligations under the MOU (however, the foregoing conditions shall be deemed satisfied unless a breach of such obligations has a material adverse effect); (ix) if the Tender Offer has commenced on or after the date of execution of the Master Transaction Agreement, no circumstances have arisen in the Company that would allow the withdrawal of the Tender Offer pursuant to the provisions of the Article 27-11, Paragraph 1 of the Act (however, limited to the circumstances set out in Article 14, Paragraph 1, Item 3 of the Order for Enforcement of the Financial Instruments and Exchange Act (Cabinet Order No. 321 of 1965, as amended)) (the foregoing condition shall be deemed satisfied unless the circumstances have a material adverse effect); and (x) no proposal for a dividend of surplus to be implemented on or after the execution date of the Master Transaction Agreement has been approved at any shareholders' meeting of the Company. If any Counter Proposal is made before the commencement of the Tender Offer, the Tender Offeror shall not bear an obligation to commence the Tender Offer unless Fujitsu covenants in writing not to accept the Counter Proposal or the Tender Offeror changes the Tender Offer Price to an amount higher than the consideration proposed in the Counter Proposal and changes the Repurchase Price to an amount that, taking tax effects into account, is substantially higher than the consideration proposed in the Counter Proposal. Further, since the Master Transaction Agreement sets out termination events (Note 8), the Tender Offeror will not bear an obligation to commence the Tender Offer in the event that the Master Transaction Agreement terminates. Please refer to "(1) Master Transaction Agreement" in "4. Matters Concerning Material Agreements Related to Tender Offer" below for details of the Master Transaction Agreement.

Note 2: The Master Transaction Agreement stipulates that any or all of the Tender Offer Conditions Precedent may be waived at the discretion of the Tender Offeror.

Note 3: Please refer to "(1) Master Transaction Agreement" in "4. Matters Concerning Material Agreements Related to Tender Offer" below for details of Fujitsu's obligations under the Master Transaction Agreement.

Note 4: Please refer to "(1) Master Transaction Agreement" in "4. Matters Concerning Material Agreements Related to Tender Offer" below for details of the representations and warranties of Fujitsu under the Master Transaction Agreement.

Note 5: "Material adverse effect" means any material adverse effect on the business, financial condition, assets, liabilities, operating results, or cash flow of the Company and its subsidiaries as a whole or on the execution of the Transactions, or any specific risk thereof.

Note 6: "Clearance" means the obtainment (including the expiration of the applicable waiting period without objection from the relevant authorities) of permits and authorizations, etc. (meaning a permit, authorization, license, approval, consent, registration, notification, or any other similar act or procedure by the national government, a local government, or any other public agency or administrative agency as required by relevant laws and regulations; hereinafter the same) under the competition laws and regulations of Japan, China, South Korea, and Vietnam and notification to the Committee on Foreign Investment in the United States

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(however, after the execution of the Master Transaction Agreement, Fujitsu, the Company, and the Tender Offeror shall consult regarding that notification, and the Tender Offeror shall determine whether or not it will be included in the scope of permits and authorizations, etc. to be obtained for Clearance). If it is found that there are other permits and authorizations, etc. required for the execution or performance of the Master Transaction Agreement in addition to the above, and the Tender Offeror reasonably determines that such permits and authorizations, etc. are necessary, the Tender Offeror may add such permits and authorizations, etc. to the scope of permits and authorizations, etc. to be obtained for Clearance after discussion in good faith with Fujitsu. Any additions will be disclosed in a timely manner.

Note 7: "Settlement failure event" means, with regard to the financial institutions that will become the lenders in the borrowings by the Tender Offeror or its parent company for the purpose of financing the Transactions (referring to MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Hachijuni Bank, Ltd., and Aozora Bank, Ltd.), (i) any natural disaster, war, or outbreak of terrorism, (ii) any breakdown or failure of electric, communication or various clearing systems, (iii) any event where, in the Tokyo Interbank Market, a loan of yen funds cannot be executed, and (iv) any other event that is similar to (i) through (iii) above for any reason not attributable to the financial institutions for which the financial institutions objectively and reasonably determine that it is objectively impossible to conduct the settlement of the financing due to that event.

Note 8: Please refer to "(1) Master Transaction Agreement" in "4. Matters Concerning Material Agreements Related to Tender Offer" below for details of termination events set out in the Master Transaction Agreement.

In light of such situation, as stated in "(V) Unanimous Approval of All Non-Interested Directors of Company" of "(6) Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest" of "3. Details, Basis, and Reasons for Opinion Regarding Tender Offer" below, the Company also resolved (i) that when the Tender Offer is commenced, the Board of Directors will request that the Special Committee

1. consider whether there are any changes in its opinion as expressed to the Board of Directors as of today regarding inquiring with the Special Committee about the Transactions, and (b) if there are no changes in its opinion, make a statement to that effect, or if there are changes in its opinion, state the changed opinion, to the Board of Directors; and (ii) that based on such opinion of the Special Committee, the Company will express its opinions on the Tender Offer again when the Tender Offer is commenced.

For details of the composition of the Special Committee and its specific activities, please refer to "(II) Procurement by Company of Written Report from Independent Special Committee" of "(6) Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest" of "3. Details, Basis, and Reasons for Opinion Regarding Tender Offer" below.

The Board of Directors resolution above was made on the assumption that the Tender Offeror intends to acquire all Company Shares through the Tender Offer and a series of subsequent procedures and that the Company Shares will be delisted.

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1. Overview of Tender Offeror

(1)	Name	JICC-04, Ltd.
(2)	Location	1-3-1, Toranomon, Minato-ku, Tokyo
(3)	Title and Name of	Osamu Itabashi, Representative Director
Representative
		(i) Controlling and managing the business activities of a
		company through the acquisition and holding of the share
(4)	Business Description	certificates, etc. that company
		(ii) Any and all business including or related to the
		preceding item
(5)	Capital	100,000 yen
(6)	Date of Establishment	September 29, 2023
(7)	Major Shareholders and	JIC Capital, Ltd.	100%
	Shareholding Ratios
(8)	Relationships Between the	Company and the Tender Offeror
	Capital Relationships	N/A
	Personnel Relationships	N/A
	Transactional	N/A
	Relationships
	Conditions Applicable to	N/A
	Related Parties

1. Purchase Price, Etc.
   5,920 yen per common share (the "Tender Offer Price")
2. Details, Basis, and Reasons for Opinion Regarding Tender Offer

1. Details of Opinion Regarding Tender Offer

The Company resolved at its Board of Directors meeting held today to express its current opinion that, if commenced, it will express an opinion to support the Tender Offer and to recommend that its shareholders tender their shares in the Tender Offer, based on the basis and reasons stated in "(2) Basis and Reasons for Opinion Regarding Tender Offer" below. According to the Tender Offeror, the Tender Offer is scheduled to commence within 10 business days from the date on which the Tender Offer Conditions Precedent (excluding those to be satisfied on the commencement date of the Tender Offer) are satisfied (or waived by the Tender Offeror; however, if a Counter Proposal has been made as of such date, then the earlier of (a) the date on which 20 business days have elapsed since the date on which Fujitsu Limited ("Fujitsu") makes a request to the Tender Offeror for consultation regarding changing the Tender Offer Price and the Repurchase Price or (b) the date on which Fujitsu covenants in writing that it will not accept the Counter Proposal), and as of today, the Tender Offeror aims to commence the Tender Offer in or around late August 2024, but since it is difficult to accurately estimate the amount of time required for the procedures involving foreign competition authorities and authorities having jurisdiction over investment control

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laws and regulations.

In light of such situation, as stated in "(V) Unanimous Approval of All Non- Interested Directors of Company" of "(6) Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest" below, the Company also resolved (i) that when the Tender Offer is commenced, the Board of Directors will request that the Special Committee

1. 1. consider whether there are any changes in its opinion as expressed to the Board of Directors as of today, and (y) if there are no changes in its opinion, make a statement to that effect, or if there are changes in its opinion, state the changed opinion, to the Board of Directors; and (ii) that based on such opinion of the Special Committee, the Company will express its opinions on the Tender Offer again when the Tender Offer is commenced.
2. Basis and Reasons for Opinion Regarding Tender Offer

Statements in "(2) Basis and Reasons for Opinion Regarding Tender Offer" that pertain to the Tender Offeror are based on explanations provided by the Tender Offeror.

1. Overview of Tender Offer
   The Tender Offeror is a stock company (kabushiki kaisha) established on September 29, 2023 and whose business primarily consists of controlling and managing the business activities of the Company through the acquisition and holding of the share certificates, etc. of the Company after the completion of the Tender Offer. As of today, JIC Capital, Ltd. ("JICC"), which is a wholly-owned subsidiary of Japan Investment Corporation ("JIC"), holds all of the issued shares of the Tender Offeror. During the period up to the time of settlement of the Tender Offer, JICC will transfer all of the issued shares of the Tender Offeror to JIC PEF1 Limited Partnership and JIC PEFJ1 Limited Partnership, both managed by JICC. In addition, during the period from the completion of the Tender Offer to the time of settlement of the Tender Offer, the Tender Offeror will commence procedures for a capital contribution by a third-party allotment of common shares through which shares are allotted by the Tender Offeror to the JICC Funds (meaning other investment limited partnerships or other entities in which JICC or its subsidiaries or affiliates act as general partners, including JIC PEF1 Limited Partnership and JIC PEFJ1 Limited Partnership; the same shall apply hereinafter; investment limited partnerships included in the JICC Funds include those in which Hachijuni Sustainability No. 1 Fund (general partner: Hachijuni Investment Co., Ltd. ("Hachijuni Investment")) will invest as a limited partner), Dai Nippon Printing Co., Ltd. ("DNP"), and Mitsui Chemicals, Inc. ("Mitsui Chemicals"; the JICC Funds, DNP, and Mitsui Chemicals are hereinafter collectively referred to as the "JICC Alliance," and the capital contribution, the "Contribution (Common Shares)") and procedures for a capital increase by a third-party allotment of preferred shares (non-voting class shares with no conversion rights to common stock) through which shares are allotted by the Tender Offeror to DNP and Mitsui Chemicals (the "Contribution (Preferred Shares)"; together with the Contribution (Common Shares), the "Contributions") for the purpose of providing for the funds necessary to execute the Transactions. JIC, the JICC Alliance, and the Tender Offeror do not hold any Company Shares as of today. After the Contributions, the JICC Funds, DNP, and Mitsui Chemicals will

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hold 80.00%, 15.00%, and 5.00% of common stock of the Tender Offeror, respectively.

Today, the Tender Offeror entered into a master transaction agreement with Fujitsu (the "Master Transaction Agreement"; for details of the Master Transaction Agreement, please refer to "(1) Master Transaction Agreement" in "4. Matters Concerning Material Agreements Related to Tender Offer" below), and decided to conduct the Tender Offer for all of the Company Shares (excluding the Company Shares held by Fujitsu (number of shares held: 67,587,024 shares, ownership percentage (Note 9): 50.02%; the "Fujitsu Holding Shares") and the treasury shares held by the Company) as part of the series of transactions aimed at making the Tender Offeror the sole shareholder of the Company and taking the Company Shares listed on the Prime Market of Tokyo Stock Exchange as of today private (the "Transactions") on the condition that the Tender Offer Conditions Precedent are satisfied or, at the discretion of the Tender Offeror, waived.

Note 9: "Ownership percentage" means the ratio of the shares owned (rounded to two decimal places) to the sum (135,117,512 shares) of the total number of issued shares of the Company as of September 30, 2023 (135,171,942 shares) as stated in the Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023 (based on Japanese GAAP) announced by the Company on October 26, 2023 minus the treasury shares (54,430 shares) owned by the Company as of September 30, 2023. This applies hereinafter in the calculation of the ownership percentage.

The Transactions consist of the following procedures through which the Tender Offeror intends to ultimately make the Company a wholly-owned subsidiary of the Tender Offeror:

1. the Tender Offer by the Tender Offeror;
2. procedures for the Share Consolidation (as defined in "(4) Policy for organizational restructuring after the Tender Offer (matters relating to a so- called "Two-Step Acquisition")" below; hereinafter the same) to be conducted by the Company in order to make the Tender Offeror and Fujitsu the only shareholders of the Company if the Tender Offeror is not able to acquire all of the Company Shares (excluding the Fujitsu Holding Shares and the treasury shares held by the Company) through the Tender Offer (the "Squeeze-Out Procedures");
3. (i) the provision of funds to the Company by the Tender Offeror (which is expected to be through a capital increase by a third-party allotment through which shares are allotted to the Tender Offeror or through a loan to the Company (the "Financing")) and (ii) a decrease in the amounts of the stated capital, capital reserve, and retained earnings reserve of the Company in accordance with Article 447, Paragraph 1 and Article 448, Paragraph 1 of the Companies Act (Act No. 86 of 2005, as amended, the "Companies Act") (the "Capital Decrease, Etc.") (Note 10), each to be conducted by the Company for the purpose of procuring funds and a distributable amount necessary for conducting the Company's acquisition of the Fujitsu Holding Shares on the condition that the Share Consolidation becomes effective (the "Share Repurchase"); and
4. the Share Repurchase.

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Please refer to "(4) Policy for organizational restructuring after the Tender Offer (matters relating to a so-called"Two-Step Acquisition")" below for details of the Share Consolidation.

Note 10:It is planned that, upon the Capital Decrease, Etc., the Company will transfer (i) part or all of the decreased stated capital and capital reserve to other capital surplus and (ii) all of the decreased retained earnings reserve to retained earnings carried forward.

In connection with the Tender Offer, the Tender Offeror has executed the Master Transaction Agreement with Fujitsu as of today, pursuant to which Fujitsu has agreed (i) not to tender any of the Fujitsu Holding Shares that it holds in the Tender Offer, and (ii) to sell all of the Fujitsu Holding Shares that it holds in response to the Share Repurchase. For details of the Master Transaction Agreement, please refer to "(1) Master Transaction Agreement" in "4. Matters Concerning Material Agreements Related to Tender Offer" below.

If the total number of share certificates, etc. tendered in response to the Tender Offer (the "Tendered Share Certificates, Etc.") is less than the minimum number of shares to be purchased (22,491,400 shares (Note 11), ownership percentage: 16.65%) (Note 12), then the Tender Offeror will not purchase any of the Tendered Share Certificates, Etc. Since the purpose of the Transactions is to take the Company Shares private, the minimum number has been set as the number of shares required to carry out the Transactions given that a special resolution in the shareholders' meeting as provided for in Article 309, Paragraph 2 of the Companies Act is required for carrying out the procedures for the Share Consolidation as described in "(4) Policy for organizational restructuring after the Tender Offer (matters relating to a so-called"Two-Step Acquisition")" below and given that the Tender Offeror has agreed with Fujitsu that Fujitsu will not tender the Fujitsu Holding Shares in the Tender Offer and that the Tender Offeror and Fujitsu will vote in favor of each proposal regarding the Squeeze-Out Procedures if the Tender Offer is successfully completed. On the other hand, because the purpose of the Transactions is to take the Company Shares private, the Tender Offeror has not set a limit on the maximum number of shares to be purchased, and if the total number of Tendered Share Certificates, Etc. is equal to or greater than the minimum number of the shares to be purchased (22,491,400 shares), then the Tender Offeror will purchase all of the Tendered Share Certificates, Etc.

Note 11: The minimum number of shares to be purchased (22,491,400 shares) will be set as the number of shares calculated by (i) subtracting the treasury shares (54,430 shares) owned by the Company as of September 30, 2023 from the total number of issued shares of the Company as of September 30, 2023 (135,171,942 shares) as stated in Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023 (Based on Japanese GAAP), (ii) multiplying the number of voting rights (1,351,175 voting rights) represented by that number of shares (135,117,512 shares) by two thirds, (iii) deducting from that number (900,784 voting rights, rounded up to the nearest whole number) the number of voting rights (675,870 voting rights) represented by the Fujitsu

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Holding Shares (67,587,024 shares), and then (iv) multiplying that number (224,914 voting rights) by 100.

Note 12:The minimum number of shares to be purchased is temporary and depends on the information as of today, and the actual minimum number of shares to be purchased in the Tender Offer may differ from the number above due to changes in the number of treasury shares held by the Company and the number of Company Shares held by Fujitsu occurring hereafter. While the final minimum number of shares to be purchased is to be determined before the commencement of the Tender Offer based on the latest information available as of the commencement of the Tender Offer, no changes are planned to the basic framework, including the method of calculating the minimum number of shares to be purchased.

Diagrams summarizing the Transactions are provided below.

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Before the implementation of the Tender Offer (current status)

• As of December 12, 2023, Fujitsu holds 67,587,024 Company Shares (ownership percentage: 50.02%) and other shareholders (excluding the Company) hold the remaining 67,530,488 shares (ownership percentage: 49.98%).

Fujitsu

Other shareholders

50.02%

49.98%

Company

The Tender Offer by the Tender Offeror

• The Tender Offeror will conduct the Tender Offer for all of the Company Shares (excluding the Fujitsu Holding Shares and the treasury shares held by the Company).

*Includes funds in which Hachijuni Investment invests

JICC Funds*

DNP

Mitsui Chemicals

80.00%

15.00%

5.00%

Fujitsu will not tender its shares in

the Tender Offer

Other

Fujitsu

Tender Offeror

shareholders

Tender Offer for a

50.02%

49.98% minimum of 16.65%

After the Tender Offer, the combined

Company equity interest of the Tender Offeror and Fujitsu will be two thirds or more

• Investment limited partnerships included in the JICC Funds include those in which Hachijuni Investment will invest as a limited partner. The same shall apply hereinafter.

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