Bain Capital raises offer for Fuji Software by 1.6% over Kkr's (KKR.US) offer

Bain Capital has raised its offer for Fuji Soft, a Japanese software developer, according to people familiar with the matter, meaning the bidding war between Bain and private equity giant Kkr will continue. Bain is planning to pay 9,600 yen a share for Fuji Soft, a 1.6 per cent premium to Kkr’s offer of 9,451 yen, valuing Fuji Soft at about ¥647bn ($4.3bn), the people said. It is unclear how Bain’s latest offer will affect the deal, which is due to expire on Dec. 19. Any rival bid would likely need Kkr’s cooperation, as it has already secured more than a third of Fuji Soft’s shares after earlier bids from investors 3D Investment Partners and Farallon Capital Management were accepted. Shares in Fuji Soft rose as much as 2.7 per cent to ¥9,785 on Wednesday morning after media reports of Bain’s higher offer. The stock has risen more than 63 per cent this year. Citigroup analysts set a target price of ¥10,000 for Fuji Soft last month. Bain’s latest move highlights how quickly the landscape of private equity in Japan is changing. The weaker yen and a push by regulators for better corporate governance has increased the chances of buying high-quality Japanese companies at cheap valuations. Reform has made Japanese companies more open to change, whether through privatisation or the sale of non-core businesses, which has attracted interest from global private equity giants. In August, Kkr made a $3.9bn offer to take Fuji Soft private. A few weeks later, Bain announced a new offer, 7 per cent higher than Kkr’s. The deal appeared to be on hold until Kkr raised its offer to 1 yen more than Bain’s in late November, winning support from Fuji Soft’s board, while Bain’s first competitive bid was rejected.