The Japanese consumer health company said it received a preliminary, nonbinding proposal from CVC and a Japanese fund, and has made no decision. Shares rose about 17%.
One of Japan's best-known consumer health companies is the latest target for a private equity take-private.
Kobayashi Pharmaceutical said on Friday it had received a preliminary, nonbinding joint proposal to take it private from affiliates of CVC Capital Partners and Nippon Sangyo Suishin Kiko, a Japanese investment fund. The company said no decision has been made.
Shares closed limit-up in Tokyo at 6,885 yen, a rise of 1,000 yen, or about 17%, with buy orders left unfilled. The company was worth about 459.3 billion yen at Thursday's close. At Friday's price, its market value is roughly 537 billion yen.
The shareholders
The proposal lands in a company with a divided shareholder base. The founding Kobayashi family remains a large holder. Oasis Management, the activist fund, is one of the largest outside investors and has opposed the family's influence over the company.
Any take-private would need Oasis and other minority holders to accept the price, which makes the shareholder register as relevant to the outcome as the offer itself.
The price
Friday's limit-up move shows investors expect a premium. Because the proposal is preliminary and no price has been confirmed by the company, the stock is trading on expectations of what a final offer would pay.
The next step is Kobayashi's formal response. A special committee, disclosed terms or a tender offer would give the market a price to measure against. Oasis's stance, once public, will show whether the deal faces a vote fight.