Key Takeaways
- • EQT has raised its offer for Kakaku.com seven times in a six-month bidding war, extending its tender offer for the tenth time, with the deadline for shareholders at its latest price of 3,683 yen ($23) per share set for November 12.
- • Bain Capital and SoftBank subsidiary LY Corp raised their counteroffer to 3,700 yen per share, rising to 3,720 yen if they secure the support of Kakaku's third-largest shareholder, KDDI.
- • Kakaku.com's shares closed at 3,747 yen on Wednesday, trading above both offer prices and signaling market expectations of further price increases.
- • Financial sponsor-backed M&A in Japan totalled $24 billion in January-September, nearly double the $13 billion in the same period of 2024, according to LSEG data.
- • Strategic buyers such as LY are driving up prices in contested Japanese buyouts, prompting targets to consider running auctions rather than negotiating with a single suitor.
Summary
A battle between private equity firms EQT and Bain Capital to acquire Kakaku.com, a Japanese internet company valued at about $5 billion, illustrates how takeovers in Japan are becoming increasingly contested. EQT made its initial bid in May, after which Bain teamed up with SoftBank Group subsidiary LY Corp, which operates the Line messaging app and Yahoo Japan portal, and submitted a rival offer. Since then, EQT has raised its offer price seven times to win the support of Kakaku shareholders, and on Wednesday it extended its offer period for the tenth time, with the deadline for tendering at the latest price of 3,683 yen ($23) a share set for November 12.
Bain and LY raised their offer to 3,700 yen on Monday, rising to 3,720 yen if they secure the backing of KDDI, Kakaku's third-largest shareholder. Kakaku's shares ended Wednesday at 3,747 yen, above both bids, indicating that market participants expect further price increases are possible. The contest is the highest-profile takeover battle since KKR fended off Bain last year to acquire Fuji Soft in a deal valuing the software firm at $4.1 billion, reflecting a market where contentious takeover fights remain relatively uncommon.
Dealmakers said the growing number of private equity take-privates, combined with the participation of non-financial strategic buyers, is raising prices and increasing the risk of bidding contests. According to LSEG data, financial sponsor-backed M&A deals in Japan totalled $24 billion in January-September, just short of a year earlier but almost double the $13 billion recorded in the same period of 2024. Other contested situations include the CVC and KKR bid for cosmetics firm Mandom and Advantage Partners' counterbid for Kadoya Sesame Mills against Integral's offer.
LY, which has said it sees synergies between its internet businesses and Kakaku's price comparison and restaurant review sites, considered bidding for Kakaku in recent years, a person familiar with the matter said, and joined Bain after media reported EQT's interest in April. Such synergies include referring customers to LY's online services and integrating them into SoftBank's PayPay digital wallet ecosystem. Carlyle partner Yusuke Watanabe said bidding alongside companies in the same sector is gaining traction because strategic buyers may see greater growth potential in targets, a trend likely to lift final bid prices. Freshfields partner Gregory Salathe noted that strategic partners can also provide an exit route for funds struggling to offload investments.
Bank of America's Akihiko Manaka, co-head of investment banking and M&A in Japan, said targets are increasingly likely to auction themselves rather than negotiate with a single suitor, a shift from past practice. "If it's a good asset, the sort of company everyone wants, competition is naturally fierce, making it difficult to buy cheaply," Manaka said. "The buyers really have to work for it."
Bain and LY raised their offer to 3,700 yen on Monday, rising to 3,720 yen if they secure the backing of KDDI, Kakaku's third-largest shareholder. Kakaku's shares ended Wednesday at 3,747 yen, above both bids, indicating that market participants expect further price increases are possible. The contest is the highest-profile takeover battle since KKR fended off Bain last year to acquire Fuji Soft in a deal valuing the software firm at $4.1 billion, reflecting a market where contentious takeover fights remain relatively uncommon.
Dealmakers said the growing number of private equity take-privates, combined with the participation of non-financial strategic buyers, is raising prices and increasing the risk of bidding contests. According to LSEG data, financial sponsor-backed M&A deals in Japan totalled $24 billion in January-September, just short of a year earlier but almost double the $13 billion recorded in the same period of 2024. Other contested situations include the CVC and KKR bid for cosmetics firm Mandom and Advantage Partners' counterbid for Kadoya Sesame Mills against Integral's offer.
LY, which has said it sees synergies between its internet businesses and Kakaku's price comparison and restaurant review sites, considered bidding for Kakaku in recent years, a person familiar with the matter said, and joined Bain after media reported EQT's interest in April. Such synergies include referring customers to LY's online services and integrating them into SoftBank's PayPay digital wallet ecosystem. Carlyle partner Yusuke Watanabe said bidding alongside companies in the same sector is gaining traction because strategic buyers may see greater growth potential in targets, a trend likely to lift final bid prices. Freshfields partner Gregory Salathe noted that strategic partners can also provide an exit route for funds struggling to offload investments.
Bank of America's Akihiko Manaka, co-head of investment banking and M&A in Japan, said targets are increasingly likely to auction themselves rather than negotiate with a single suitor, a shift from past practice. "If it's a good asset, the sort of company everyone wants, competition is naturally fierce, making it difficult to buy cheaply," Manaka said. "The buyers really have to work for it."
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