Bain Beats Opposition to Buy Japanese Nursing Home Provider
Bain Beats Opposition to Buy Japanese Nursing Home Provider
(Bloomberg) -- Bain Capital LP pulled off its bid for Japanese nursing home provider Nichiigakkan Co., overcoming shareholder opposition and a last-minute offer from a rival private equity company.
The U.S. investment firm’s 1,670 yen a share tender offer values Nichiigakkan at 121.9 billion yen ($1.1 billion). It’s taking an 82.27% stake in the Tokyo-based company, which will be delisted as planned, Nichiigakkan said Tuesday.
The deal, part of a management buyout, has faced roadblocks since its early May announcement. Hong Kong-based hedge fund Lim Advisors Ltd. had questioned the timing and price of the offer, which came during the pandemic-fueled market turmoil.
Bain had to extend the offer period three times in addition to raising its purchase price from the initial 1,500 yen a share because the stock stayed well above that level for most of the time. Lim, which has represented investment funds that own Nichiigakkan shares, maintained that the fair value is 2,400 yen a share.
“Activists played a certain role in this deal -- the share price was bumped because investors and activists were willing to buy higher than the originally offered price,” said Travis Lundy, a special situations analyst who publishes on Smartkarma. Still, the agreed amount was “quite inexpensive” and a “good price for the buyer,” he said.
On Monday, Baring Private Equity Asia said it had proposed to some Nichiigakkan founding family members to pay 2,000 yen a share in a tender offer, although the Japanese firm said it hadn’t received such an offer.
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