EQT's vehicle lifted its tender price to ¥3,683 from ¥3,682 and extended the offer to Nov. 12, its tenth extension. A Bain Capital group in which LY Corp. plans to invest has proposed ¥3,700, and Kakaku shares closed above both.
EQT has kept its bid for Kakaku.com alive. It has not matched the competition.
Kamgras 1, EQT's bidding vehicle, raised its tender offer price by 1 yen to ¥3,683 a share on Wednesday, the day its offer was due to expire, and extended the offer period to Nov. 12. It is the tenth extension, taking the offer to 125 business days.
The new price remains below the ¥3,700 a share proposed by BCPE Blitz Cayman, a vehicle formed by Bain Capital in which LY Corp. plans to invest, or ¥3,720 if KDDI agrees not to tender its shares. The Bain group has said it expects to launch its own tender offer in mid-November.
What the extra yen does
A 1-yen increase is too small to change any shareholder's decision on price. Its purpose is procedural. On Tuesday, Kakaku said it treats the Bain group's proposal as a qualifying counteroffer and asked EQT to discuss changing its price. Kakaku's notice recites the Bain group's view that if EQT does not match within 10 business days, Kakaku would be released from its obligation to support EQT's offer. By raising and extending, EQT avoids letting its offer lapse while that window runs, which by our count ends around Nov. 11.
The market's verdict
Kakaku shares closed at ¥3,747 in Tokyo on Wednesday, about 1.7% above EQT's new price and about 1.3% above the Bain group's. A stock trading above every bid suggests that investors expect a higher one.
The contest fits a broader pattern. Sponsor-backed M&A in Japan reached $24 billion in the first nine months of the year, compared with $13 billion a year earlier, Reuters reported.
Who blinks first?
One reading is that EQT is buying time to decide whether to make a real increase. Its offer remains live, the board still supports it until the matching window closes, and a raise above ¥3,700 would put it back in front.
The other is that EQT's room is limited. A 1-yen move signals reluctance, the Bain group's higher proposal stands, and if EQT does not match, the Bain group argues the board can switch its support, leaving EQT's extended offer competing against a higher one.
What to watch
Any EQT price increase before the matching window closes around Nov. 11, Kakaku's board recommendation if it changes, the launch of the Bain group's tender in mid-November, KDDI's decision, and the share price relative to both offers.