CANON INC. (Registrant) |
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Date....April 21, 2011.... | By | ....../s/...... Masashiro Kobayashi.............. | ||
(Signature)* | ||||
Masashiro Kobayashi General Manager Global Finance Management Center Canon Inc. |
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1. | Notice Regarding Commencement of Tender Offer by Subsidiary |
April 21, 2011 |
1. | Purpose of the Tender Offer |
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(1) | Outline of the Tender Offer |
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The Company decided at a board of directors meeting held on April 21, 2011 to acquire all
common shares issued by the Target Company (excluding treasury shares held by the Target
Company), which are listed in the second section of Osaka Securities Exchange Co., Ltd. (the
Osaka Securities Exchange), through the Tender Offer for the purpose of making the Target
Company a wholly-owned subsidiary of the Company. |
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In the Tender Offer, there is no upper limit in the number of shares to be purchased. On the
other hand, the lower limit in the number of shares to be purchased is set so that in case
the total number of tendered shares does not reach 3,778,900 (which is calculated by rounding
up to the nearest share unit the number of shares equivalent to 66.7% (3,778,804 (rounded up
to the nearest whole number)) of the number of shares (5,665,372) calculated as the total
number of common shares issued by the Target Company as of March 31, 2011 (6,453,689) as
stated in the Share Buyback Report of the Target Company (submitted on April 1, 2011) less
the number of treasury shares owned by the Target Company as of March 31, 2011 (788,317) as
stated in the same report), the Company will not acquire any of the tendered shares.
Therefore, in case the total number of tendered shares does not reach said lower limit, the
Company will not acquire any of the tendered shares. |
- 1 -
In the case where the Company has failed to acquire all common shares issued by the Target
Company (excluding treasury shares held by the Target Company), as mentioned in (4)
Post-acquisition reorganization policy (matters concerning so-called two-step acquisition)
below, the Company will request the Target Company after the completion of the Tender Offer
to follow the procedure for reorganizing itself into a wholly-owned subsidiary of the Company
through the acquisition of all shares issued by the Target Company (excluding treasury shares
held by the Target Company) by the Company (the Procedure for Reorganization into
Wholly-Owned Subsidiary) and will make the Target Company a wholly-owned subsidiary of the
Company. |
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Before the commencement of the Tender Offer, the Company has concluded a tender offer
agreement (the Tender Offer Agreement) with Nishimoto Real Estate Co., Ltd. whose
representative director is Mr. Haruo Nishimoto, the Director and Chairman of the Company
(number of shares held: 1,342,600; percentage of its shareholding to the total number of
common shares issued by the Target Company as of March 31, 2011 (6,453,689) as stated in the
Share Buyback Report of the Target Company (submitted on April 1, 2011) (the Shareholding
Percentage): 20.80% (rounded to the nearest hundredth; hereinafter the same shall apply for
percentages in this section)), Mr. Haruo Nishimoto (number of shares held: 687,900;
Shareholding Percentage: 10.66%), Mr. Yasuo Nishimoto (number of shares held: 152,500;
Shareholding Percentage: 2.36%), Ms. Aiko Nishimoto (number of shares held: 150,600;
Shareholding Percentage: 2.33%), Ms. Seiko Nishimoto (number of shares held: 113,500;
Shareholding Percentage: 1.76%), and Mr. Norihiro Nishimoto (number of shares held: 20,100;
Shareholding Percentage: 0.31%) (hereinafter, Nishimoto Real Estate Co., Ltd, Mr. Haruo
Nishimoto, Mr. Yasuo Nishimoto, Ms. Aiko Nishimoto, Ms. Seiko Nishimoto, and Mr. Norihiro
Nishimoto are collectively referred to as the Founding Family Shareholders) as of April 21,
2011. Based on the Tender Offer Agreement, the Founding Family Shareholders have agreed to
apply for the Tender Offer with respect to all common shares in the Target Company held by
each of them (2,467,200 shares in total; Shareholding Percentage: 38.23%) (for the outline of
the Tender Offer Agreement, see (6) Matters concerning the important agreement between the
Bidder and the shareholders of the Target Company on the application for the tender offer
below). |
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According to the Target Company, the Target Company, after considering the appropriateness of
the series of tender offer procedures proposed including the Procedure for Reorganization
into Wholly-Owned Subsidiary and the Tender Offer Price (to be defined in (4)
Post-acquisition reorganization policy (matters concerning so-called two-step acquisition)
below) as well as other terms and conditions of the Tender Offer, judged, in view of the
Target Companys financial conditions, business environment, etc., that the Tender Offer will
strengthen the business foundation of the Target Company, contribute to the enhancement of
its enterprise value in the medium- to long-term period, and provide the shareholders of the
Target Company with an opportunity to sell their shares at a price with a reasonable premium,
and therefore, passed a resolution at a board of directors meeting held on April 21, 2011 to
express its support to the Tender Offer and to encourage the shareholders of the Target
Company to apply for the Tender Offer. |
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According also to the Target Company, the abovementioned resolution concerning the opinion on
the Tender Offer was passed at a board of directors meeting held on April 21, 2011 by a
unanimous vote of the directors present excluding Mr. Haruo Nishimoto (Mr. Haruo Nishimoto,
who as a Founding Family Shareholder has concluded the Tender Offer Agreement with the
Company to the effect that he will apply for the Tender Offer, did not participate in the
deliberations and the vote on the abovementioned resolution as |
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he may be deemed to be a director who has a special interest in the abovementioned resolution
concerning the opinion on the Tender Offer (Companies Act (Act No. 86 of 2005, including any
subsequent amendments thereto; hereinafter the same shall apply), Article 369, Paragraph 2),
but all other directors of the Target Company participated in the vote). The Company was also
informed by the Target Company that all the corporate auditors of the Target Company
participated in the deliberations at the board of directors meeting mentioned above and each
of them stated his/her opinion that there was no objection to the opinion of the board of
directors on the Tender Offer. |
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(2) | Background and process for the decision to undertake the Tender Offer |
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The background and process for the Companys decision to undertake the Tender Offer together
with the post-acquisition management policy are explained below. In the following
explanation, the description about the Target Company is based on the explanation the Company
received from the Target Company. |
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Since its establishment in 1968, the Company has been a member of the global Canon Group,
which operates a wide range of businesses in over 180 countries, and, as a company in charge
of the overall marketing of Canon products in the domestic market, has orchestrated the sales
and marketing of the products of Canon Inc. (Canon) and related services to provide
value-added solutions to the customers. In recent years, the Company has been striving to
evolve into an information services company from its previous business portfolio
predominantly consisting of the wholesale businesses in order to strengthen its business
model. In addition, the Company has been implementing in phases a business platform to offer
IT solutions since 2003 as part of the efforts toward improving the competitiveness and
quality of services. |
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Upholding the Long-term Management Objectives Phase II (2011-2015) (the Long-term Management
Objectives), the Company has been working to realize them since January 2011 by developing
and following an implementation plan covering the first three years (the Three-year
Management Plan (2011-2013)). The central theme of the Long-term Management Objectives is
Forwardcharting a new course for growth through business creation. Accordingly, the
Companys strategic focus is on the diversification of businesses and the evolution into a
service company operating on a global basis and the Company and its subsidiaries and
affiliates as a group (the Group) is working to achieve an ambitious goal of consolidated
sales of at least 850 billion yen in FY2015. |
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Under the business strategy described above, the expansion of the medical equipment business
has been identified as one of the most important themes. Therefore, the Company considers the
medical equipment business as one of the highest-priority business segments. In the past, the
medical equipment business of the Company has incorporated the wholesale business of medical
examination equipment including Canon products such as X-ray digital equipment and
ophthalmological equipment as well as other imported products and the medical solutions
business (provided through Canon ITS Medical Inc., a Group company) that provides the
development and sales of electronic health records, receipt computers, and various other
software to support medical services. |
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It is our most important challenge going forward to expand and strengthen such
medical-related businesses. We also aim at promptly establishing other healthcare-related
solutions as new business domains to bolster our efforts toward the overall expansion of the
medical equipment business. |
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Canon, our parent company, also regards the medical equipment business as one of the
important growth drivers and is strengthening the current ophthalmological equipment product
line-up including X-ray digital equipment and ophthalmological equipment as well as the
development of next-generation products such as mammography through, for example, the
industry-academia joint project with Kyoto University. In the long term, the Canon Group aims
to contribute to a broader sphere of the medical industry. |
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Meanwhile, the Target Company has engaged in the business of selling and manufacturing
medical-related items and medical equipment for the main since its establishment in 1956. Its
mission is to deliver high quality medical equipment, health care equipment, and services to
the domestic and foreign customers on a timely basis. By leveraging the advantage of having
both the manufacturing and trading functions, the Target Company has developed and proposed
products and services that fit well to the customer needs in a speedy and flexible manner.
The Target Company has established a strong customer base and distribution channel among
medical facilities including national and public hospitals, university affiliated hospitals,
private hospitals, nursing homes, medical clinics and public health centers, as well as
medical equipment distribution companies all over Japan based on the long-term trade
relationship with them. |
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Under its corporate vision of a health culture creation company, the Target Company not
only deals with medical equipment, but also promotes preventive healthcare aimed at the
extension of health life years in an aging society, thereby striving to play a part in the
development of the medical and health care industries in a broad sense without limiting its
activities within the traditional medical fields. |
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In our view, the medical industry will likely undergo a loss of business opportunities or
heightened competition within a few years due to the medical system reform or changes in the
external environment and the management of the medical business is exposed to a high degree
of uncertainty. |
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Under such business environment, the Company and the Target Company have been discussing and
analyzing various alternatives to increase the enterprise value of both companies since
around September 2010. As a result, the Company and the Target Company have reached a
conclusion that in order for the businesses of both companies to realize further growth under
the current competitive industry environment, it would be beneficial for both companies that
the Company makes the Target Company a wholly-owned subsidiary to strengthen capital ties and
both companies work together to quickly build a robust collaborative platform that is able to
leverage the management resources of both companies. |
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At present, the medical equipment business of the Group is specialized in the wholesale of
certain products and the provision of solutions to small-scale hospitals. Therefore, the
current challenge is to build a relationship with medium to large-scale hospitals and to
improve the capability to propose user-oriented solutions. The Target Company has developed a
strength in its sales approach (manufacturing-trading company) based on the market-in
principle, i.e, product development and commercialization carried out internally or with the
cooperation of external plants, leveraging the know-how and distribution channel in the
medical equipment business and adhering faithfully to end-user and customer needs. Upon the
creation of capital ties between the two companies, we aim to achieve further development and
growth of both companies by closely |
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combining the strength of the Target Company with the management resources of the Group. More
specifically, we expect to achieve synergy in the following fields. |
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In the medical imaging business, we consider that the gist of the strategy should be to
establish the Group as an all-inclusive provider and aim to realize business expansion
based on the strong distribution channels of the Target Company, which is expected to be
built upon (1) the enhancement of the medical examination equipment line-up and (2) the
provision of medical imaging solutions based primarily on the medical image management
system, combined with the provision of related services such as (3) the provision of
business-related solutions and (4) the provision of information management services by the
medical data center. |
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In the dispensing support business, we aim at developing further business by combining the
existing business of the Target Company with the IT solutions and document solutions provided
by the Company. For example, we will start proposing to dispensing pharmacies in hospitals
and independent dispensing pharmacies comprehensive solutions including electronic health
records, combined with the provision of dispensing equipment, in particular automatic powder
medicine dispense and folding machines, which is the area in which the Target Company has
competitive advantage. The Target Company has implemented a strategy to propose comprehensive
solutions for new pharmacy management that combines the dispensing system with health care
promotions, targeted at local pharmacies and drugstores aiming at becoming the family
pharmacy in the local community. By succeeding to this strategy, we will aim to be a total
solution provider in the field of dispensing. |
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In the health care business, we will strive to expand our business by distributing various
products of the Target Company through the strong national distribution network of the
Company and proposing solutions based on the cooperation between the two companies in the
area of IT services. |
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The Company regards the infection control business as an important new business domain that
will play a significant role in the planned expansion of the medical equipment business and
intends to make significant efforts to further develop the infection control business of the
Target Company. Specific synergy effects we expect include worldwide distribution of the
products of the Target Company through the global network of the Canon Group. |
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In the overseas business, we expect that the strategy of the Target Company to export
products of the Target Company Group and other excellent Japanese products and import foreign
products with unique features can be extended to realize aggressive business development and
expansion under the alliance with the companies in the Canon Group that has global presence
with a particular focus in emerging economies and will be consistent with the future overseas
business development of the Company (i.e., the import and export business). |
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Other synergy effects we expect include the availability of the functions and know-how of the
Target Company Group in the areas of product development, production, and manufacturing,
development and production of new products based on the cooperation between the Target
Company Group and the Group, improved customer support resulting from the increase in the
number of support centers, and enhanced customer support business functions, particularly in
the area of IT solutions. |
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After taking into consideration all of the above factors, the Company has decided to commence
the Tender Offer based on the judgment that the synergy effects expected in various business
domains from the closer relationship between the Company and the |
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Target Company and the integrated management implemented through the capital ties between
these two companies will contribute to the enhancement of the enterprise value of both of
them. |
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(3) | Post-acquisition management policy |
|
The Company, as of the date of this release, has the intention to adopt a post-acquisition
management policy (1) to strive to realize further business growth by positioning the Target
Company as the core company in the medical equipment business, (2) to maintain, in principle,
the employment of the current employees and the current management team of the Target
Company, (3) to maintain, in principle, the current brand of the Target Company for the time
being, and (4) to positively consider the implementation of human resource exchanges between
the Company and the Target Company by way of temporary transfer and other arrangements. Upon
successful completion of the Tender Offer, the Company will, under the management policy
outlined above, accelerate the realization of synergy effects in various business domains
through the closer relationship and the integrated business management between the Company
and the Target Company. The Company and the Target Company have already agreed that the
Target Company will submit to the 55th annual general meeting of shareholders to be held on
June 22, 2011 (the Annual General Shareholders Meeting) a proposal regarding the election
of officers that the candidates for directors and corporate auditors designated by the
Company be elected as the directors and corporate auditors of the Target Company. The
Founding Family Shareholders have also agreed in the Tender Offer Agreement that when such
proposal regarding the election of officers is submitted to the Annual General Shareholders
Meeting, they will cast their vote in support of the proposal and that they will exercise all
other voting rights at the Annual General Shareholders Meeting in accordance with the
instructions by the Company. Furthermore, in the Tender Offer Agreement, Mr. Haruo Nishimoto,
the Director and Chairman of the Target Company, has agreed that he shall, upon completion of
the Tender Offer, promptly resign from the office of director of the Target Company. |
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According to the Target Company, the Target Company passed a resolution at a board of
directors meeting held on April 21, 2011 that it maintains dividend forecast of 10 yen per
share for the fiscal term ending March 31, 2011 as well as that it will not distribute any
interim dividend for the interim period ending September 30, 2011. Incidentally, according to
the Target Company, its basic policy has been to limit the frequency of dividend distribution
to once per year. |
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(4) | Post-acquisition reorganization policy (matters concerning so-called two-step acquisition) |
|
As stated in (1) Outline of the Tender Offer above, the Company decided to acquire all
common shares issued by the Target Company (excluding treasury shares held by the Target
Company) through the Tender Offer for the purpose of making the Target Company a wholly-owned
subsidiary of the Company. In the case where the Company has failed to acquire all common
shares issued by the Target Company (excluding treasury shares held by the Target Company),
the Company will, after the completion of the Tender Offer, implement the Procedure for
Reorganization into Wholly-Owned Subsidiary described below to provide the shareholders of
the Target Company (excluding the Company) with an opportunity to sell their shares in the
Target Company |
- 6 -
and to acquire all common shares issued by the Target Company (excluding treasury shares held
by the Target Company). |
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The first step will be to request the Target Company to hold an extraordinary general meeting
of shareholders (the Extraordinary General Shareholders Meeting) to be scheduled sometime
in August 2011 in order for the shareholders to vote on each of the proposals that (1) the
Target Company amend the articles of incorporation to allow it to issue class shares that are
different from ordinary shares, (2) that the Target Company amend the articles of
incorporation to allow it to attach to all of its common shares a clause to make them class
shares subject to wholly call (meaning the provisions on the matters prescribed in Article
108, Paragraph 1, Item 7 of the Companies Act; hereinafter the same shall apply), and (3)
that the Target Company acquire all of said common shares (excluding treasury shares held by
the Target Company) from the common shareholders and deliver different class shares in the
Target Company to them in exchange for the acquisition. |
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If the proposal (1) above is approved by the Extraordinary General Shareholders Meeting and
the amendment to the articles of incorporation pertaining to the proposal (1) above is put
into effect, the Target Company will become a Company with Class Shares prescribed by the
Companies Act. In order for the Target Company to put into effect the amendment to the
articles of incorporation pertaining to the proposal (2) above, it is as a Company with Class
Shares required, pursuant to Article 111, Paragraph 2, Item 1 of the Companies Act, to pass a
separate resolution at a class meeting of ordinary shareholders subject to wholly call (the
Class Meeting) in addition to the resolution at the Extraordinary General Shareholders
Meeting approving the proposal (2) above. Therefore, the Company will request the Target
Company to hold the Class Meeting on the same day as the Extraordinary General Shareholders
Meeting. |
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Upon completion of the Tender Offer, the Company is expected to hold 66.7% or more of the
common shares in the Target Company (excluding treasury shares held by the Target Company)
and if the abovementioned proposals are submitted to the Extraordinary General Shareholders
Meeting and the Class Meeting, the Company intends to cast its vote in support of each of the
proposals. |
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If the procedure described above is successfully completed, all common shares in the Target
Company will be subject to wholly call and all of them (excluding treasury shares held by the
Target Company) will have been acquired by the Target Company in exchange for different class
shares in the Target Company delivered to the shareholders as consideration for such
acquisition. If the number of the different class shares in the Target Company that should be
delivered to the shareholders includes a fraction of less than one share, the Target Company
shall, in accordance with the procedure prescribed in Article 234 of the Companies Act and
other related laws and regulations, sell the number of such shares equivalent to the total
sum of the fractions by auction (in cases where the total sum includes a fraction of less
than one, such fraction shall be rounded off) and deliver the proceeds of that auction to the
shareholders in cash. With regard to the amount of cash to be delivered to each shareholder
as a result of the sale of different class shares in the Target Company equivalent to the
total sum of the fractions, the Company intends to request the Target Company to set such
amount to be equal to the amount calculated by multiplying the tender offer price per common
share in the Target Company in the Tender Offer (the Tender Offer Price) by the number of
common shares in the Target Company that had been held by each shareholder. The specific
terms and the number of the different class shares in the Target Company to be delivered as
consideration for the acquisition of the common shares subject to wholly call have not been
determined as of the date of this release. However, the Company |
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intends to request the Target Company to set the number of such shares to be delivered to the
shareholders of the Target Company other than the Company who did not apply for the Tender
Offer at a fraction of less than one share in order for the Company to come to own all shares
issued by the Target Company (excluding treasury shares held by the Target Company). |
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The Company also intends, in principle, to complete the Procedure for Reorganization into
Wholly-Owned Subsidiary by the end of November 2011. |
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For the purpose of protecting the rights of minority shareholders related to the Procedure
for Reorganization into Wholly-Owned Subsidiary, the Companies Act provides (i) that when the
articles of incorporation is amended as described in (2) above to attach to the common shares
a clause to make them class shares subject to wholly call, the common shareholders may,
pursuant to the provisions of Articles 116 and 117 of the Companies Act and other laws and
regulations, demand that the Target Company purchase the common shares from them and (ii)
that if a resolution is passed at the Extraordinary General Shareholders Meeting to approve
the acquisition of all common shares in the Target Company subject to wholly call (excluding
treasury shares held by the Target Company) from the common shareholders as described in (3)
above, the common shareholders may, pursuant to the provisions of Article 172 of the
Companies Act and other laws and regulations, file a petition to the court for a
determination of the price for such acquisition. |
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The Company may, depending on the change in the applicable laws and regulations or the
interpretation thereof by the regulatory authorities, the percentage of shareholding by the
Company after the completion of the Tender Offer, the status of shareholding by the common
shareholders of the Target Company other than the Company, etc., achieve the objective of
making the Target Company a wholly-owned subsidiary by way of a method that is different from
the Procedure for Reorganization into Wholly-Owned Subsidiary, but generally has the same
effect as said procedure. The timing of such procedure may also change. However, even in such
cases, the Company intends to determine the amount of consideration to be received by the
shareholders of the Target Company other than the Company based on the Tender Offer Price.
Specific procedures to be followed in such cases would be publicly notified promptly after
consultation with the Target Company. |
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(5) | Prospect for delisting and reasons therefor |
|
As of the date of this release, the common shares of the Target Company are listed in the
Second Section of the Osaka Securities Exchange. Since there is no upper limit in the number
of shares to be purchased in the Tender Offer, depending on the outcome of the Tender Offer,
the common shares of the Target Company may be delisted in accordance with the delisting
criteria of the Osaka Securities Exchange through the procedure predetermined by the
Exchange. Even if the common shares of the Target Company do not meet the delisting criteria
at the completion of the Tender Offer, as stated in (4) Post-acquisition reorganization
policy (matters concerning so-called two-step acquisition) above, the Company intends to
make the Target Company a wholly-owned subsidiary through the Procedure for Reorganization
into Wholly-Owned Subsidiary, in which case the Target Company will be delisted in accordance
with the delisting criteria of the Osaka Securities Exchange through the procedure
predetermined by the Exchange. Once the common shares of the Target Company are delisted,
they can no longer be traded in the Osaka Securities Exchange. |
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(6) | Matters concerning the important agreement between the Bidder and the shareholders of the
Target Company on the application for the tender offer |
|
On April 21, 2011, the Company has concluded the Tender Offer Agreement with the Founding
Family Shareholders under which they agree to apply for the Tender Offer with respect to all
common shares in the Target Company held by each Founding Family Shareholder (2,467,200
shares in total; Shareholding Percentage: 38.23%). In the Tender Offer Agreement, (i) the
Founding Family Shareholders agreed that they shall have the board of directors of the Target
Company, at the Annual General Shareholders Meeting, to submit a proposal regarding the
election of officers that the candidates for directors and corporate auditors designated by
the Company be elected as the directors and corporate auditors of the Target Company, (ii)
when the Tender Offer is completed and such proposal is submitted to the Annual General
Shareholders Meeting, the Founding Family Shareholders agreed that they shall cast their
vote in support of the proposal and exercise all other voting rights at the Annual General
Shareholders Meeting in accordance with the instructions by the Company and (iii) Mr. Haruo
Nishimoto, the Director and Chairman of the Target Company, agreed that he shall, upon
completion of the Tender Offer, promptly resign from the office of director of the Target
Company. |
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2. | Outline of the Tender Offer |
|
(1) | Outline of the Target Company |
1)
|
Company name | ELK Corporation | ||||||
2)
|
Address | 1-1-22 Noninbashi, Chuo-ku, Osaka, 540-0011, Japan. | ||||||
3)
|
Title and name of the company representative | President Mr. Keiji Matsumoto | ||||||
4)
|
Business | Sales and manufacturing of medical-related items and medical equipment | ||||||
5)
|
Capitalization | 2,533,499,200 yen | ||||||
6)
|
Date of incorporation | May 21, 1956 | ||||||
Nishimoto Real Estate Co., Ltd. | 20.80 | % | ||||||
Haruo Nishimoto | 10.66 | % | ||||||
Major shareholders and the percentage of their shareholdings (as of September 30, 2010) | Nishimoto Trade Partner Stock Ownership Association | 4.83 | % | |||||
7)
|
Carestream Health Japan Co., Ltd. | 3.66 | % | |||||
Yasuo Nishimoto | 2.36 | % | ||||||
Aiko Nishimoto | 2.33 | % | ||||||
Wahei Takeda Resona Bank, Ltd. Nippon Life Insurance Company Seiko Nishimoto |
2.33 2.28 2.23 1.76 |
% % % % |
||||||
8) | Relationship between the Bidder and the Target Company | |||||||
Capital ties | Not applicable. | |||||||
Personnel ties | Not applicable. | |||||||
Trade relations | The Company and its affiliates sell X-ray digital equipment and |
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other products to and purchase blood pressure monitors and other products from the Target Company. | ||||||||
Related party status | Not applicable. |
(2) | Schedule, etc. |
1) | Schedule |
Resolution of the board of
directors
|
Thursday, April 21, 2011 | |
Date of public announcement
of the commencement of the
Tender Offer
|
Friday, April 22, 2011 An electronic public notice will be placed and a notification to that effect will be placed on the Nihon Keizai Shimbun. (URL: http://info.edinet-fsa.go.jp/) |
|
Date of submission of tender
offer notification
|
Friday, April 22, 2011 |
2) | The originally submitted period of the Tender Offer |
||
Friday, April 22, 2011 Wednesday, June 8, 2011 (30 business days) |
|||
3) | Possibility of extension at the request of the Target Company |
||
Not applicable. |
(3) | Tender Offer Price |
|
670 yen per common share |
||
(4) | Grounds for calculating the Tender Offer Price |
1) | Basis of calculation |
||
In determining the Tender Offer Price, the Company requested GCA Savvian Group
Corporation (GCA), an external valuation expert who is independent from both the
Company and the Target Company, to act as a financial advisor and perform the valuation
of common shares in the Target Company, which is to be used as a reference information
in the determination of the Tender Offer Price. GCA performed the valuation of the
shares in the Target Company (the Valuation) by using the discounted cash flow method
(the DCF method), the average market price method, and the comparable transaction
method. The Company received a stock valuation report from GCA (the Valuation Report
(GCA)) on April 20, 2011. (The Company has not obtained a fairness opinion on the
Tender Offer Price.) The ranges of the value per share in the Target Company calculated
under each of the abovementioned methods are as follows: |
DCF method: |
611 yen 763 yen | |||
Average market price method: |
388 yen 391 yen | |||
Comparable transaction method: |
648 yen 686 yen |
Under the DCF method, the range for the value of the stock per share is determined by
analyzing the enterprise value and the value of stock based on the present value of
expected future free cash flows of the Target Company |
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discounted at a certain discount
rate. The expected future free cash flows are
estimated based on the business plan submitted by the Target Company, interview with
the management of the Target Company, and the trend of the recent financial results of
the Target Company. |
|||
Under the average market price method, the range for the value of the stock per share
is determined based on the closing price of the shares in the Target Company on April
20, 2011 (the Base Date) in the Second Section of the Osaka Securities Exchange as
well as the simple average stock prices (based on closing prices) for a period of one,
three, and six months from the Base Date (388 yen, 388 yen, 391 yen, and 388 yen,
respectively). |
|||
Under the comparable transaction method, the range for the value of the stock per share
is determined in reference to the average premium observed for comparable transactions.
More specifically, with regard to the tender offers carried out by other companies in
the past one year that are highly similar to the Tender Offer, the average premium was
calculated by comparing the tender offer price and the stock price (closing price) on
the business day immediately preceding the date of announcement of the tender offer and
the simple average of the closing prices over a period of one, three, and six months
immediately preceding the date of announcement of the tender offer. |
|||
In performing the Valuation, GCA also examined the contents of full term performance
forecast for the fiscal year ending March, 2011 detailed in the Notice of Revisions to
Forecast and Dividend for the Fiscal Year ending March 31, 2011 and the Interim Period
ending September 30 published by the Target Company on April 21, 2011. |
|||
Referring to the Valuation Report (GCA) and in comprehensive consideration of the
result of the acquisition due diligence conducted by the Company, the trend of the
market price of the shares of the Target Company, the prospect for the number of shares
subject to the application for the Tender Offer, etc., the Company, having consulted
with the Founding Family Shareholders and the Target Company, determined the Tender
Offer Price at 670 yen per share. |
|||
The Tender Offer Price (670 yen) is equivalent to an amount calculated as the closing
price of ordinary market transactions in the Second Section of the Osaka Securities
Exchange on April 20, 2011, the business day immediately preceding the announcement of
the commencement of the Tender Offer by the Company (388 yen) plus a premium of 72.68%
(rounded to the nearest hundredth; hereinafter the same shall apply for percentages in
this section), an amount calculated as the simple average of the closing prices of
ordinary market transactions over a period of one month ending April 20, 2011 (388 yen)
(rounded to the nearest whole number; hereinafter the same shall apply for yen in this
section) plus a premium of 72.68%, an amount calculated as the simple average of the
closing prices of ordinary market transactions over a period of three months ending
April 20, 2011 (391 yen) plus a premium of 71.36%, and an amount calculated as the
simple average of the closing prices of ordinary market transactions over a period of
six months ending April 20, 2011 (388 yen) plus a premium of 72.68%, respectively. |
|||
2) | Price determination process |
||
In our view, the medical industry will likely undergo a loss of business opportunities
or heightened competition within a few years due to the medical |
- 11 -
system reform or
changes in the external environment and the management of the medical business is
exposed to a high degree of uncertainty. Under such business environment, the Company and the Target Company have been discussing and analyzing various alternatives to increase the enterprise value of both companies since around September 2010. As a result, the Company and the Target Company have reached a conclusion that in order for the businesses of both companies to realize further growth under the current competitive industry environment, it would be beneficial for both companies that the Company makes the Target Company a wholly-owned subsidiary to strengthen capital ties and both companies work together to quickly build a robust collaborative platform that is able to leverage the management resources of both companies. Therefore, the Company at a board of directors meeting held on April 21, 2011 decided to carry out the Tender Offer and determined the Tender Offer Price through the following process. |
(i) | Name of the third party from which the Company obtained an opinion on
price |
||
In determining the Tender Offer Price, the Company requested GCA, an external
valuation expert who is independent from both the Company and the Target Company,
to act as a financial advisor and perform the valuation of common shares in the
Target Company, which is to be used as a reference information in the
determination of the Tender Offer Price. The Company received Valuation Report
(GCA) from GCA on April 20, 2011. |
|||
(ii) | Summary of the obtained opinion |
||
GCA performed the valuation of the shares in the Target Company by using the DCF
method, the average market price method, and the comparable transaction method.
The ranges of the value per share in the Target Company calculated under each of
the abovementioned methods are as follows: |
DCF method: |
611 yen 763 yen | |||
Average market price method: |
388 yen 391 yen | |||
Comparable transaction method: |
648 yen 686 yen |
(iii) | Process through which the Tender Offer Price is determined in
consideration of the obtained opinion |
||
Referring to the Valuation Report (GCA) and in comprehensive consideration of the
result of the acquisition due diligence conducted by the Company, the trend of
the market price of the shares of the Target Company, the prospect for the number
of shares subject to the application for the Tender Offer, etc., the Company,
having consulted with the Founding Family Shareholders and the Target Company,
determined at a board of directors meeting held on April 21, 2011 the final
Tender Offer Price at 670 yen per share. (The Company has not obtained a fairness
opinion on the Tender Offer Price.) |
|||
On the other hand, according to the Target Company, the board of directors of the
Target Company retained Deloitte Tohmatsu FAS Co., Ltd. (Tohmatsu), a third
party valuation expert who is independent from both |
- 12 -
the Company and the Target
Company, for the purpose of verifying the appropriateness of the Tender Offer and
requested Tohmatsu to perform the
valuation of its common shares, which is intended to be used as a basic material
for judging the fairness and appropriateness of the Tender Offer Price, and
obtained a stock valuation report from Tohmatsu on April 20, 2011. In order also
to ensure the fairness and appropriateness of the decision of the board of
directors of the Target Company concerning the Tender Offer, the Target Company
received necessary legal advice from Kitahama Partners, a law firm. We were also
informed that the Target Company has not obtained a fairness opinion on the
Tender Offer Price from Tohmatsu. According to the Target Company, the result of
the valuation of shares in the Target Company performed by Tohmatsu is as
follows. |
|||
Having obtained from the board of directors of the Target Company the explanation
on the materials such as the business status report and the future business plan
prepared by the Target Company (the Target Company Business Plan), Tohmatsu
calculated the value of shares in the Target Company under certain assumptions
and conditions developed based on the obtained information. The stock valuation
report indicated that Tohmatsu calculated, under the going concern assumption,
the value of shares in the Target Company by using the average market price
method, the comparable company method, and the DCF method. |
|||
In the calculation, Tohmatsu valuates in consideration of the contents of full
term performance forecast for the fiscal year ending March, 2011 detailed in the
Notice of Revisions to Forecast and Dividend for the Fiscal Year ending March
31, 2011 and the Interim Period ending September 30 published by the Target
Company on April 21, 2011. Under the average market price method, the range for
the value of the stock per share is determined to be 391 yen to 406 yen by
analyzing the volume-weighted average stock prices of the shares in the Target
Company in the Second Section of the Osaka Securities Exchange for a period of
one, three, and six months from April 20, 2011 (the Valuation Base Date) (406
yen, 397 yen, and 391 yen, respectively) in view of the recent prices and trading
volume of the shares in the Target Company. |
|||
Under the comparable company method, the range for the value of the stock per
share is determined to be 361 yen to 483 yen by analyzing various comparative
multiples of listed companies that are similar to the Target Company. |
|||
Under the DCF method, the range for the value of the stock per share is
determined to be 594 yen to 690 yen based on the enterprise value calculated by
discounting the future cash flows of the Target Company as of December 31, 2010
to the present value at a certain discount rate. The future cash flows were
estimated based on the Target Company Business Plan. |
|||
Tohmatsu neither is a related party of the Company and the Target Company nor has
a significant interest in the Tender Offer requiring disclosure. |
|||
According to the Target Company, the Target Company, after considering the
appropriateness of the series of tender offer procedures proposed including the
Procedure for Reorganization into Wholly-Owned Subsidiary and the Tender Offer
Price as well as other terms and conditions of the Tender Offer based, among
others, on the contents of the stock valuation |
- 13 -
report dated April 20, 2011
obtained from Tohmatsu and the legal advice obtained from Kitahama Partners,
judged, in view of the Target Companys
financial conditions, business environment, etc., that the Tender Offer will
strengthen the business foundation of the Target Company, contribute to the
enhancement of its enterprise value in the medium- to long-term period, and
provide the shareholders of the Target Company with an opportunity to sell their
shares at a price with a reasonable premium, and therefore, passed a resolution
at a board of directors meeting held on April 21, 2011 to express its support to
the Tender Offer and to encourage the shareholders of the Target Company to apply
for the Tender Offer. |
|||
According also to the Target Company, the abovementioned resolution concerning
the opinion on the Tender Offer was passed at a board of directors meeting held
on April 21, 2011 by a unanimous vote of the directors present excluding Mr.
Haruo Nishimoto (Mr. Haruo Nishimoto, who as a Founding Family Shareholder has
concluded the Tender Offer Agreement with the Company to the effect that he will
apply for the Tender Offer, did not participate in the deliberations and the vote
on the abovementioned resolution as he may be deemed to be a director who has a
special interest in the abovementioned resolution concerning the opinion on the
Tender Offer (Companies Act, Article 369, Paragraph 2), but all other directors
of the Target Company participated in the vote). We were also informed by the
Target Company that all the corporate auditors of the Target Company participated
in the deliberations at the board of directors meeting mentioned above and each
of them stated his/her opinion that there was no objection to the opinion of the
board of directors on the Tender Offer. |
3) | Relationship with the valuation expert |
||
GCA, who is the financial advisor (valuation expert) to the Company, neither is a
related party of the Company nor has a significant interest in the Tender Offer. |
(5) | Number of shares to be purchased |
Number of shares to be | Lower limit of the number of | Upper limit of the number of | ||
purchased | shares to be purchased | shares to be purchased | ||
5,665,372 | 3,778,900 | | ||
Note | 1. | In case the total number of tendered shares does not reach the predetermined lower limit
(3,778,900), the Company will not acquire any of the tendered shares. In the case where the
total number of tendered shares is equal to or greater than the predetermined lower limit
(3,778,900), the Company will acquire all of the tendered shares. |
|
2. | The Company does not intend to acquire any of the treasury shares held by the
Target Company through the Tender Offer. |
||
3. | As there is no upper limit in the number of shares to be purchased in the Tender
Offer, the number indicated above as the number of shares to be purchased (5,665,372)
represents the maximum number of shares in the Target Company that can be purchased by
the Bidder in the Tender Offer. Said maximum number is calculated as the total number of
common shares issued by the Target Company as of March 31, 2011 (6,453,689) as stated in
the Share Buyback Report of the Target |
- 14 -
Company (submitted on April 1, 2011) less the
number of treasury shares owned by the Target Company as of March 31, 2011 (788,317) as
stated in the same report. |
|||
4. | The number indicated above as the lower limit in the number of shares to be
purchased (3,778,900) is calculated by rounding up to the nearest share unit the number
of shares equivalent to 66.7% (3,778,804 (rounded up to the nearest whole number)) of the
number of shares (5,665,372) calculated as the total number of common shares issued by
the Target Company as of March 31, 2011 (6,453,689) as stated in the Share Buyback Report
of the Target Company (submitted on April 1, 2011) less the number of treasury shares
owned by the Target Company as of March 31, 2011 (788,317) as stated in the same report. |
||
5. | Shares less than one unit will also be subject to the Tender Offer. In the case
where a holder of shares less than one unit has exercised his/her right to demand
purchase of shares less than one unit pursuant to the provisions of the Companies Act,
the Target Company may purchase its own shares during the purchase period of the Tender
Offer (the the Tender Offer Period) in accordance with the procedure prescribed in the
applicable laws and regulations. In this case, the Target Company purchases said shares
at a price determined in accordance with the provisions of applicable laws and
regulations and the Share Handling Regulations of the Target Company. |
(6) | Changes in percentage of shareholding after the purchase |
Number of voting rights
pertaining to shares, etc.,
held by the Bidder before the
Tender Offer
|
| (Percentage of shareholding before the Tender Offer | - | %) | ||||||
Number of voting rights
pertaining to shares, etc.,
held by persons who have a
special relationship before
the Tender Offer
|
| (Percentage of shareholding before the Tender Offer | - | %) | ||||||
Number of voting rights
pertaining to shares, etc. to
be purchased
|
56,653 | (Percentage of shareholding after the Tender Offer | 100 | %) | ||||||
Total number of voting rights
held by all shareholders of
the Target Company
|
56,649 | |||||||||
Note | 1. | Number of voting rights pertaining to shares, etc. to be purchased represents the number
of voting rights pertaining to the number of shares to be purchased (5,665,372). |
|
2. | Total number of voting rights held by all shareholders of the Target Company
represents the number of voting rights held by all shareholders as stated in the
Quarterly Report for the third quarter of the 55th fiscal term of the Target Company
(submitted on February 14, 2011). However, since all shares issued by the Tender Offer
(excluding treasury shares held by the Target Company) are subject to the Tender Offer,
the Percentage of shareholding before the Tender Offer and the Percentage of
shareholding after the Tender Offer are calculated by using as the denominator of the
calculation formula the number of voting rights (56,653) pertaining to the number of
shares (5,665,372) calculated as the total number of common shares issued by the Target
Company as of March 31, 2011 (6,453,689) as |
- 15 -
stated in the Share Buyback Report of the
Target Company (submitted on April 1, 2011) less the number of treasury shares owned by
the Target Company as of March
31, 2011 (788,317) as stated in the same report. (The number of shares per share unit of
the Target Company is 100.) |
(7) | Total purchase amount: 3,795,799,240 yen |
|
(Note) The total purchase amount is calculated as the number of shares to be purchased by
the Tender Offer (5,665,372) multiplied by the Tender Offer Price (670 yen). |
||
(8) | Settlement method |
1) | Name and the location of the head office of a securities house, a bank, etc.
handling the settlement |
||
SMBC Nikko Securities Inc. 3-1, 3-chome, Marunouchi, Chiyoda-ku, Tokyo, Japan |
|||
2) | Settlement start date |
||
Wednesday, June 15, 2011 |
|||
3) | Settlement method |
||
A notice on purchase under the Tender Offer will be mailed to the address of the
persons who grant an approval for the purchase of shares, etc. or apply for the sale of
shares pertaining to the Tender Offer (the Applicant Shareholders) (or, in the case
of an Applicant Shareholder who is a resident in a foreign nation (including
shareholders who are judicial persons; hereinafter referred to as Foreign
Shareholders), the standing proxy of the Applicant Shareholder residing in Japan (the
Standing Proxy)) without delay after the closing of the Tender Offer Period.
Purchase will be settled in cash. The tender offer agent specified in (11) below will
remit proceeds pertaining to the sale of shares to the address designated by Applicant
Shareholders (or, in the case of Foreign Shareholders, their Standing Proxies) without
delay after settlement begins. |
|||
4) | Procedure for returning share certificates, etc. |
||
In case the Company decides not to acquire any of the tendered shares in accordance
with provisions of 1) Conditions described in the items of Article 27-13, Paragraph 4
of the Act or 2) Conditions of withdrawal of the Tender Offer and procedure for
disclosure of withdrawal under (9) Other terms and procedures for the Tender Offer
below, share certificates, etc. that need to be returned will be restored to the
original state at the time of the application (meaning the state of the shares under
which they are no longer subject to the execution of the order to apply for the Tender
Offer) in the account opened by the Applicant Shareholders under their names with the
tender offer agent on the second business day after the last day of the Tender Offer
Period (or, in case of withdrawal of the Tender Offer, the date of such withdrawal). |
(9) | Other terms and procedures for the Tender Offer |
1) | Conditions described in the items of Article 27-13, Paragraph 4 of the Act |
||
In case the total number of tendered shares does not reach the predetermined lower
limit (3,778,900), the Company will not acquire any of the tendered shares. |
- 16 -
In the case
where the total number of tendered shares is equal to or greater than
the predetermined lower limit (3,778,900), the Company will acquire all of the tendered
shares. |
|||
2) | Conditions of withdrawal of the Tender Offer and procedure for disclosure of
withdrawal |
||
If any of the events described in Item 1 (i) through (ix), (xii) through (xviii), Item
2, Item 3 (i) through (viii) and (x), Item 4, and Item 5 of Paragraph 1 of Article 14,
and Items 3 through 6 of Paragraph 2 of Article 14 of the Order for Enforcement of the
Financial Instruments and Exchange Act (Cabinet Order No. 321 of 1965 including any
subsequent amendments thereto; hereinafter referred to as the Order) occurs, the
Tender Offer may be withdrawn. |
|||
The events referred to by Item 3 (x) of Paragraph 1 of Article 14 of the Order shall be
the following events that are considered to be similar to those listed in (i) through
(ix) of said item: (1) where it has been found that any of the statutory disclosure
documents submitted by the Target Company in the past contained a fake statement about
important matters or omitted a statement on important matters that should be stated,
(2) where an important contract of the Target Company has been terminated due to
circumstances that occurred after the date of announcement of the Tender Offer, and (3)
where any of the events listed in Item 3 (i) through (ix) of Paragraph 1 of Article 14
of the Order has occurred to any of the significant subsidiaries of the Target Company. |
|||
In case of withdrawal, an electronic public notice will be placed and a notification to
that effect will be placed on the Nihon Keizai Shimbun. However, if it is impractical
to publicly notify by the last day of the Tender Offer Period, the Company will make an
announcement in accordance with the method prescribed in Article 20 of the Cabinet
Office Ordinance on the Disclosure of Takeover Bids by Non-issuers (Ordinance of the
Ministry of Finance No. 38 of 1990 including any subsequent amendments thereto;
hereinafter referred to as the Ordinance) and officially notify immediately
thereafter. |
|||
3) | Conditions for and details of reducing purchase price and procedure for
disclosure of price reduction |
||
In case the Target Company takes any of the actions set out in Article 13, Paragraph 1
of the Order during the Tender Offer Period pursuant to the provisions of Article 27-6,
Paragraph 1, Item 1 of the Act, the Bidder may reduce the purchase price in accordance
with the standard set forth in Article 19, Paragraph 1 of the Ordinance. In case of
price reduction, an electronic public notice will be placed and a notification to that
effect will be placed on the Nihon Keizai Shimbun. However, if it is impractical to
publicly notify by the last day of the Tender Offer Period, the Company will make an
announcement in accordance with the method prescribed in Article 20 of the Ordinance
and officially notify immediately thereafter. |
|||
In the case where the purchase price is reduced, share certificates, etc. for which the
application was made prior to the date of such public notice, will be also purchased at
the reduced price. |
|||
4) | Right of Applicant Shareholders for termination of agreement |
||
Applicant Shareholders may terminate an agreement pertaining to the Tender Offer at any
time during the Tender Offer Period. Applicant Shareholders |
- 17 -
intending to terminate an
agreement are advised to deliver or send by mail a
document stating the intention to terminate an agreement pertaining to the Tender Offer
(the Termination Document) to the person specified below by 15:30 (TOKYO) on the last
day of the Tender Offer Period. (Business hours may be different depending on the sales
office. Please follow the procedure described above after inquiring the business hours
of the sales office to be used.) In the case where a Termination Document is mailed, it
must arrive at the person specified below by 15:30 (TOKYO) on the last day of the
Tender Offer Period (Business hours may be different depending on the sales office.
Please follow the procedure described above after inquiring the business hours of the
sales office to be used.). |
Person who is granted the authority to receive Termination Documents |
|||
SMBC Nikko Securities Inc. 3-1, 3-chome, Marunouchi, Chiyoda-ku, Tokyo, Japan |
|||
(And other sales offices of SMBC Nikko Securities Inc. located in Japan) |
The Bidder will not demand compensations or payments of penalty for breach of contract
to an Applicant Shareholder on the ground that he/she has terminated an agreement. |
|||
5) | Procedure for disclosure of changes in purchasing terms |
||
The Bidder may change the purchasing terms during the Tender Offer Period except in the
case where such change is prohibited by Article 27-6 of the Act and Article 13 of the
Order. In the case where the Company intends to change the purchasing terms, it will
make an electronic public announcement of the detail and publish a notification on the
Nihon Keizai Shimbun. However, if it is impractical to publicly notify by the last day
of the Tender Offer Period, the Company will make an announcement in accordance with
the method prescribed in Article 20 of the Ordinance and officially notify immediately
thereafter. When changes are made to the purchasing terms, share certificates, etc. for
which the application was made prior to such public announcement, will be purchased
according to the changed purchasing terms. |
|||
6) | Procedure for disclosure of the submission of amendments to the registration
statement |
||
In case an amendment report is filed to the Director of the Kanto Local Financial
Bureau, the Company will immediately announce the contents regarding the public
announcement of the Tender Offer, but only with respect to amendments affecting the
contents of the public notice on the commencement of the Tender Offer, pursuant to the
method set forth by the Article 20 of the Ordinance. In addition, the Company will
immediately amend the tender offer circular and provide an amended version to the
Applicant Shareholders who have already received the circular. However, if changes are
minor, the Company will draw up a document that contains reasons for the amendment, the
items that have been amended and the amended contents and send it to the Applicant
Shareholders as a means of amendment. |
|||
7) | Procedure for disclosure of results of the Tender Offer |
- 18 -
The results of the Tender Offer bid will be announced in accordance with the procedures
set forth by Article 9-4 of the Order and the Article 30-2 of the Ordinance on the
following day of the last day of the Tender Offer Period. |
|||
8) | Other |
||
The Tender Offer will not be carried out in the U.S. or for the U.S., directly or
indirectly, nor will it be conducted using U.S. mail, other methods or means of
inter-state trade or international trade, including but not limited to, telephone,
telex, facsimile, e-mail, Internet communication, or securities exchange facilities in
the U.S. Applying for the Tender Offer, using the methods or means described above or
via securities exchange facilities in the U.S., is not permitted. |
|||
The tender offer notification pertaining to the Tender Offer and relevant purchase
documents may not be sent or distributed in, to, or from the U.S by mail or other
means. Such mail or distribution is not authorized. Application for the Tender Offer
violating the above restrictions directly or indirectly will not be processed. |
|||
Each of the Applicant Shareholders (or, in the case of Foreign Shareholders, their
Standing Proxies) is required to represent and warrant to the effect that they are not
in the U.S. neither at the time of the application nor the time of sending an
application form for the Tender Offer, that no information regarding the Tender Offer
or document pertaining to purchase has been received or sent in, to or from the U.S.,
that mail systems in the U.S., other methods or means of inter-state trade or
international trade, including but not limited to, telephone, telex, facsimile, e-mail,
Internet communication, or securities exchange facilities in the U.S. have not been
used for purchase or signing and delivering the application form for the Tender Offer,
directly or indirectly, and that they are not acting as an agent, custodian or a
mandatory for others without discretion (excluding cases where such others are giving
all the instructions on the Tender Offer from outside the U.S.). |
(10) | The date of public announcement of the commencement of the Tender Offer |
|
Friday, April 22, 2011 |
||
(11) | Tender offer agent |
|
SMBC Nikko Securities Inc. 3-1, 3-chome, Marunouchi, Chiyoda-ku, Tokyo, Japan |
||
3. | Post-acquisition policies and future prospects |
|
(1) | Post-acquisition policies |
|
For the post-acquisition policies, see (3) Post-acquisition management policy, (4)
Post-acquisition reorganization policy (matters concerning so-called two-step acquisition),
and (5) Prospect for delisting and reasons therefor under 1. Purpose of the Tender Offer
above. |
||
(2) | Prospects for the impact on future performance |
|
The Company is currently analyzing the impact of the Tender Offer on the performance forecast
for the current fiscal term. If it is found that the forecast needs to be revised, a revised
forecast will be promptly disclosed. |
||
4. | Other |
- 19 -
(1) | Agreement between the Bidder and the Target Company or its officers and the contents of the
agreement |
1) | Agreement between the Bidder and the officers of the Target Company and the
contents of the agreement |
||
As described in 1. Purpose of the Tender Offer (6) Matters concerning the important
agreement between the Bidder and the shareholders of the Target Company on the
application for the tender offer, on April 21, 2011, the Company has concluded the
Tender Offer Agreement with the Founding Family Shareholders including Mr. Haruo
Nishimoto, the Director and Chairman of the Target Company. Under the Tender Offer
Agreement Mr. Haruo Nishimoto has agreed (i) to apply for the Tender Offer with respect
to all common shares in the Target Company held (687,900 shares in total; Shareholding
Percentage: 10.66%), (ii) to have the board of directors of the Target Company, at the
Annual General Shareholders Meeting, to submit a proposal regarding the election of
officers that the candidates for directors and corporate auditors designated by the
Company be elected as the directors and corporate auditors of the Target Company, and
(iii) upon completion of the Tender Offer and submission of such proposal to the Annual
General Shareholders Meeting, to cast his vote in support of the proposal and exercise
all other voting rights at the Annual General Shareholders Meeting in accordance with
the instructions by the Company and (iv) upon completion of the Tender Offer and
submission of such proposal to the Annual General Shareholders Meeting, to promptly
resign from the office of director of the Target Company. |
|||
2) | Agreement between the Bidder and the Target Company and the contents of the
agreement |
||
According to the Target Company, the Target Company, after considering the
appropriateness of the series of tender offer procedures proposed including the
Procedure for Reorganization into Wholly-Owned Subsidiary and the Tender Offer Price as
well as other terms and conditions of the Tender Offer based, among others, on the
contents of the stock valuation report dated April 20, 2011 obtained from Tohmatsu and
the legal advice obtained from Kitahama Partners, judged, in view of the Target
Companys financial conditions, business environment, etc., that the Tender Offer will
strengthen the business foundation of the Target Company, contribute to the enhancement
of its enterprise value in the medium- to long-term period, and provide the
shareholders of the Target Company with an opportunity to sell their shares at a price
with a reasonable premium, and therefore, passed a resolution at a board of directors
meeting held on April 21, 2011 to express its support to the Tender Offer and to
encourage the shareholders of the Target Company to apply for the Tender Offer.
According also to the Target Company, the abovementioned resolution concerning the
opinion on the Tender Offer was passed at a board of directors meeting held on April
21, 2011 by a unanimous vote of the directors present excluding Mr. Haruo Nishimoto
(Mr. Haruo Nishimoto, who as a Founding Family Shareholder has concluded the Tender
Offer Agreement with the Company to the effect that he will apply for the Tender Offer,
did not participate in the deliberations and the vote on the abovementioned resolution
as he may be deemed to be a director who has a special interest in the abovementioned
resolution concerning the opinion on the Tender Offer (Companies Act, Article 369,
Paragraph 2), but all other directors of the Target Company participated in the vote).
We were also informed by the |
- 20 -
Target Company that all the corporate auditors of the
Target Company participated in the deliberations at the board of directors meeting
mentioned above and each
of them stated his/her opinion that there was no objection to the opinion of the board
of directors on the Tender Offer. |
|||
The Company and the Target Company have already agreed that the Target Company will
submit to the Annual General Shareholders Meeting a proposal regarding the election of
officers that the candidates for directors and corporate auditors designated by the
Company be elected as the directors and corporate auditors of the Target Company. |
(2) | Other information considered necessary for investors to decide whether to apply for the
Tender Offer |
||
The Target Company announced Notice of Revisions to Forecast and Dividend for the Fiscal
Year ended March 31, 2011 and the Interim Period ending September 30 on April 21, 2011. The
highlight of this announcement is presented below. The highlight of the announcement
presented below is an excerpt from the announcement made by the Target Company and the
Company is not in a position to be able to and did not actually verify the accuracy and
integrity of the contents. For more details, refer to the original announcement. |
i | Revisions to forecast for the fiscal year ending March 31, 2011 |
Revisions to forecast for the fiscal year ending March 31, 2011 (April 1, 2010 to March
31, 2011) |
Operating | Ordinary | ||||||||||||||||||||||||||
Net sales | income | income | Net income | Net income per | |||||||||||||||||||||||
(Millions of | (Millions of | (Millions of | (Millions of | share | |||||||||||||||||||||||
yen) | yen) | yen) | yen) | (Yen) | |||||||||||||||||||||||
Previous forecast (A)
(Announced on May
14, 2010) |
25,000 | 220 | 210 | 150 | 26.21 | ||||||||||||||||||||||
Revised forecast (B) |
21,412 | 71 | 97 | 24 | 4.34 | ||||||||||||||||||||||
Changes (B-A) |
(3,587 | ) | (148 | ) | (112 | ) | (125 | ) | | ||||||||||||||||||
Changes (%) |
(14.3 | ) | (67.4 | ) | (53.7 | ) | (83.4 | ) | | ||||||||||||||||||
(Reference) Actual
results for the
previous fiscal year
(ended March 31,
2010) |
24,296 | 219 | 196 | 183 | 32.03 | ||||||||||||||||||||||
Operating | Ordinary | ||||||||||||||||||||||||||
Net sales | income | income | Net income | Net income per | |||||||||||||||||||||||
(Millions of | (Millions of | (Millions of | (Millions of | share | |||||||||||||||||||||||
yen) | yen) | yen) | yen) | (Yen) | |||||||||||||||||||||||
Previous forecast (A)
(Announced on May
14, 2010) |
24,600 | 160 | 160 | 110 | 19.22 | ||||||||||||||||||||||
Revised forecast (B) |
20,901 | (18 | ) | 16 | (45 | ) | (7.89 | ) | |||||||||||||||||||
Changes (B-A) |
(3,698 | ) | (178 | ) | (143 | ) | (155 | ) | | ||||||||||||||||||
Changes (%) |
(15.0 | ) | | (89.6 | ) | | | ||||||||||||||||||||
(Reference) Actual
results for the
previous |
|||||||||||||||||||||||||||
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Operating | Ordinary | ||||||||||||||||||||||||||
Net sales | income | income | Net income | Net income per | |||||||||||||||||||||||
(Millions of | (Millions of | (Millions of | (Millions of | share | |||||||||||||||||||||||
yen) | yen) | yen) | yen) | (Yen) | |||||||||||||||||||||||
fiscal year
(ended March 31,
2010) |
23,873 | 191 | 182 | 175 | 30.58 | ||||||||||||||||||||||
ii | Dividend for the fiscal year ending March 31, 2011 and the interim period ending
September 30 |
||
According to the Target Company, the Target Company passed a resolution at a board of
directors meeting held on April 21, 2011 that it maintains dividend forecast of 10 yen
per share for the fiscal term ending March 31, 2011as well as that it will not
distribute any interim dividend for the interim period ending September 30, 2011.
Incidentally, according to the Target Company, its basic policy has been to limit the
frequency of dividend distribution to once per year. |
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