SoftBank-Bain raise Kakaku bid as takeover battle intensifies

Governance reforms and activist pressure are fuelling more competitive takeover battles across corporate Japan.

A bidding war for Japanese price comparison website operator Kakaku has intensified after a consortium led by SoftBank-backed LY Corporation and Bain Capital raised its takeover offer.

In a Wednesday announcement, the consortium increased its offer to JPY3,384 per share, valuing Kakaku at approximately JPY670 billion ($4.1 billion), comfortably above private equity firm EQT's competing JPY3,000-per-share bid.

Kakaku subsequently withdrew its recommendation in favor of EQT's proposal and adopted a neutral stance while discussions with both bidders continue.

The consortium is considering a September offer launch if Kakaku’s board supports the bid, arguing that they could improve Kakaku’s profitability by providing capital and managerial support, and creating efficiencies with LY’s existing businesses.

The revised proposal also leaves room for a further increase.

The LY-Bain consortium has indicated it could raise its offer to JPY3,500 per share if major shareholder KDDI agrees to tender its stake, while EQT has extended the deadline for its tender offer until July 16 to allow time to evaluate its next steps.

The battle for Kakaku follows a series of high-profile takeover contests that have transformed Japan's M&A market in recent years, with the country emerging as a more active and competitive takeover market than many international investors had previously expected.

Recent examples include Blackstone’s $3.4 billion acquisition of TechnoPro Holdings, Bain’s purchase of Seven & i’s supermarket business, and KKR’s take-private of software company Fuji Soft following a bidding war with Bain.

Boards are also facing more pressure to emphasize maximizing shareholder value when evaluating strategic transactions following reforms to Japan’s Corporate Governance and Stewardship Codes and efforts by the Tokyo Stock Exchange to improve listed companies’ capital efficiency.

These reforms have also resulted in higher levels of shareholder activism in the country, with activist investors filing 139 shareholder proposals at Japanese companies in the latest proxy season, the highest level on record.

For shareholders, competitive bidding processes can deliver significant benefits beyond a higher purchase price.

Rival offers often encourage bidders to present stronger strategic plans, clearer integration proposals, and more attractive financial terms, strengthening the negotiating position of target companies and their investors.

Attention will now turn to whether EQT responds with an improved offer or whether the LY-Bain consortium secures the shareholder support needed to complete the acquisition.

Kakaku’s stock closed at JPY3,515 on Thursday in Tokyo, up 3.7% from Wednesday’s close. The stock is up 53.6% year-to-date.

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