TOKYO--(BUSINESS WIRE)--Oct 2, 2019--

Sapporo GK:

October 2, 2019

To all parties concerned

Company Name: Sapporo GK

Managing Partner: Sapporo ISH

Executor of Managing Partner: Takaaki Fukunaga

Contact: Fortress Investment Group (Japan) GK

Tel: +81-3-6438-4400

 

While Sapporo GK (hereinafter referred to as the “Tender Offeror”) commenced the tender offer for the common shares of UNIZO Holdings Company, Limited (Code No.: 3258, Tokyo Stock Exchange) (hereinafter referred to as “Target”) on August 19, 2019 (hereinafter referred to as the “Tender Offer”), the Tender Offeror decided as of today to change the conditions of purchase, etc. through the Tender Offer.

Accordingly, the Tender Offeror hereby announces that the amendments shall be made to the “Announcement of Commencement of Tender Offer for Shares of UNIZO Holdings Company, Limited (Securities Code: 3258)” dated August 16, 2019 (including the portions amended by the “Announcement Regarding Amendments to the Press Release titled ‘Announcement of Commencement of Tender Offer for Shares of UNIZO Holdings Company, Limited (Securities Code: 3258)’ due to Changes of Conditions of Tender Offer” dated September 5, 2019 and the “Announcement Regarding Amendments to the Press Release titled ‘Announcement of Commencement of Tender Offer for Shares of UNIZO Holdings Company, Limited (Securities Code: 3258)’ due to Changes of Conditions of Tender Offer” dated September 20, 2019), as follows:

Particulars:

Portions to be amended are underlined.

1. Purpose, Etc. of Tender Offer, Etc.

(1) Overview of the Tender Offer

<Before amendment>

<Omitted>

According to “Notice of Position Statement (Approval) Regarding Tender Offer by Sapporo GK for the Shares of UNIZO Holdings Company, Limited” (hereinafter referred to as the “Press Release”) made by the Target on August 16, 2019, the Target resolved at the meeting of its board of directors held on August 16, 2019 to support the Tender Offer and to recommend that shareholders holding Target Shares tender their shares in the Tender Offer.

For details of the resolution of the above-mentioned meeting of the board of directors of the Target, please refer to the Press Release, as well as “(II) Target’s Decision-making Process and Rationale” of “(2) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer, and Management Policy Following Tender Offer” and “(IV) Approval of All Directors and Opinions Stating that No Objection was Made by Audit & Supervisory Board members of Target” of “(3) Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” below.

Please note that as it became necessary for the Tender Offeror to file the Amendment to the Tender Offer Registration Statement due to the change of the major shareholder of the Target, the tender offer period was determined to be extended to October 7, 2019, which is the day when the period of ten (10) business days will have elapsed counting from September 20, 2019 on which said Amendment was filed, pursuant to applicable laws and regulations (hereinafter referred to as the “Change of Tender Offer Conditions”).

<After amendment>

<Omitted>

According to “Notice of Position Statement (Approval) Regarding Tender Offer by Sapporo GK for the Shares of UNIZO Holdings Company, Limited” (hereinafter referred to as the “ August 16 Press Release”) made by the Target on August 16, 2019, the Target resolved at the meeting of its board of directors held on August 16, 2019 to support the Tender Offer and to recommend that shareholders holding Target Shares tender their shares in the Tender Offer.

For details of the resolution of the above-mentioned meeting of the board of directors of the Target held on August 16, 2019, please refer to the August 16 Press Release, as well as “(II) Target’s Decision-making Process and Rationale” of “(2) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer, and Management Policy Following Tender Offer” and “(IV) Approval of All Directors and Opinions Stating that No Objection was Made by Audit & Supervisory Board members of Target” of “(3) Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” below.

Subsequently, the Target announced on September 27, 2019 in “Notice of Position Statement (Withholding of Opinion) Regarding Tender Offer by Sapporo GK for UNIZO Holdings Company, Limited Stock” (hereinafter referred to as the “September 27 Press Release”) that the Target’s board of directors had resolved on September 27, 2019 to withdraw its approval of the Tender Offer and its recommendation that all shareholders tender their shares in the Tender Offer, and that the Target was reserving its position regarding the tender offer and withholding its opinion as to whether to recommend that each shareholder tender its shares in the Tender Offer.

For more details regarding this meeting of the Target’s board of directors, held on September 27, 2019, please refer to the September 27 Press Release.

In the September 27 Press Release, the Target also referred to discussions and negotiations with Fortress conducted after the commencement of the TOB. However, the Tender Offeror believes that the Target’s description of these discussions and negotiations is incomplete and thus inaccurate because the following facts were not adequately disclosed.

In discussions and negotiations with the Target to raise the tender price, the Target proposed a near term strategy of selling a substantial portion of the US assets. In a meeting with the Target on September 5, 2019, the Target presented a plan (herein referred to the “Target’s Plan”) where the sale of four US office buildings would generate approximately ¥98.2 billion in sales proceeds by December 2019. Under the Target’s Plan, these sales proceeds would not be used to reduce debt of the Target group, but instead would be used by a company owned by the Target’s employees to purchase all of the equity shares and TK interests in Sapporo GK, which would own all of the shares of the Target at the time of such purchase. The Target told Fortress that Fortress must agree to the Target’s Plan immediately or else the Target would begin negotiations with another bidder.

Fortress noted that the sale of these assets and planned use of sales proceeds would substantially reduce the Target’s tangible assets and would most likely result in the Target having negative consolidated tangible book net worth (calculated as the book value of all assets minus intangible assets minus debt and other liabilities). Fortress also noted the fact that the Target faced significant debt repayments over the next 18 months (according to the Target’s annual report, for the fiscal year ended March 31, 2019, ¥135.5 billion (¥5 billion of bonds and ¥130.5 billion of loans) is due by March 31, 2021) and thus it felt that it was important for the Target to maintain a cushion for its secured and unsecured creditors given that the sale of assets may not proceed smoothly and the fact that many of UNIZO’s hotels are limited service hotels in cities where equity analysts have cautioned that an increase in the supply of hotel rooms is resulting in declines in hotel operating revenues.

Given these concerns, Fortress did not agree to the Target’s Plan, and instead Fortress tried to discuss several alternative plans with the Target. However, on September 9, 2019, the Target unilaterally stopped all discussions and negotiations with Fortress.

Unsolicited and without any prior negotiation or discussion with Fortress, on September 18, 2019, Target sent to Fortress a draft of a new agreement (herein referred to the “Draft New Agreement”) meant to replace the MOU. The Draft New Agreement contained substantial revisions to the existing MOU and would have substantially reduced Fortress’s ability to oversee the Target’s strategy. Specifically, while the MOU limited the ability of the Target to sell assets at prices below appraised value for the Japanese assets and below book value for the US assets, without the consent of Tender Offeror, the Draft New Agreement permitted the Target to sell assets at any price, within the Target’s reasonable discretion, without any consent from or consultation with the Tender Offeror, so long as the Target had the consent of an Employee Share Ownership Management Company. Additionally, while the MOU allowed Fortress to appoint all directors of the Target, the Draft New Agreement required Fortress to obtain the consent of the Employee Share Ownership Management Company prior to appointing any directors. As a potential sponsor, Fortress considers it important to consider the interests of all stakeholders of the Target, including employees, creditors and shareholders; however, the Draft New Agreement would have limited Fortress’s ability to do this.

Separately, in the September 27 Press Release, the Target expressed concerns regarding the maintenance of employment and working conditions of the employees of the Target. However, as described in the section titled “(6) Matters concerning important agreements pertaining to this public tender purchase,” Fortress has already specifically agreed with the Target in the MOU to maintain the employment of employees of the Target, employed at the time that the MOU was signed, with working conditions at a level equivalent or superior to levels at the time the MOU was signed. During the discussions and negotiations with the Target, at no time did Fortress indicate any intention to change its plans to maintain the employment and working conditions of the Target’s employees in accordance with the MOU.

Please note that as it became necessary for the Tender Offeror to file the Amendment to the Tender Offer Registration Statement due to the change of the major shareholder of the Target, the tender offer period was determined to be extended to October 7, 2019, which is the day when the period of ten (10) business days will have elapsed counting from September 20, 2019 on which said Amendment to the Tender Offer Registration Statement was filed, pursuant to applicable laws and regulations (hereinafter referred to as the “ 1st Change of Tender Offer Conditions”).

Thereafter, as it became necessary for the Tender Offeror to file the Amendment to the Tender Offer Registration Statement due to the announcement of the Target that it had changed its opinion as to the Tender Offer, the tender offer period was determined to be extended to October 17, 2019, which is the day when the period of ten (10) business days will have elapsed counting from October 2, 2019 on which said Amendment was filed, pursuant to applicable laws and regulations (hereinafter referred to as the “1st Change of Tender Offer Conditions”).

(2) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer and Management Policy Following Tender Offer

(I) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer

<Before amendment>

<Omitted>

(ii) Outline of Target’s Business, Business Environment, and Business Challenges

According to the Press Release, the Target was founded as Daisho Fudosan Company, Limited in September 1959, had its shares listed on the Second Section of the Tokyo Stock Exchange in June 2009 and moved to the First Section of the Tokyo Stock Exchange in October 2011. At present, the Target’s group (hereinafter referred to as the “Target Group”), consisting of the Target and its 20 consolidated subsidiaries, is engaged in the real estate business, including owning, leasing, and managing office buildings, etc., as well as the hotel business, including owning and managing, etc. limited service hotels.

<Omitted>

(iii) Tender Offeror’s Consultation with Target, and the Decision-making Process of Tender Offeror, Etc.

According to the Press Release, under the above-described business environment, on July 10, 2019, H.I.S. Co., Ltd. (hereinafter referred to as “H.I.S.”) announced its implementation of a tender offer for Target Shares (hereinafter referred to as the “H.I.S. Tender Offer”). The H.I.S. Tender Offer was announced abruptly and without any notice given to the Target, and was commenced unilaterally.

<Omitted>

<After amendment>

<Omitted>

(ii) Outline of Target’s Business, Business Environment, and Business Challenges

According to the August 16 Press Release, the Target was founded as Daisho Fudosan Company, Limited in September 1959, had its shares listed on the Second Section of the Tokyo Stock Exchange in June 2009 and moved to the First Section of the Tokyo Stock Exchange in October 2011. At present, the Target’s group (hereinafter referred to as the “Target Group”), consisting of the Target and its 20 consolidated subsidiaries, is engaged in the real estate business, including owning, leasing, and managing office buildings, etc., as well as the hotel business, including owning and managing, etc. limited service hotels.

<Omitted>

(iii) Tender Offeror’s Consultation with Target, and the Decision-making Process of Tender Offeror, Etc.

According to the August 16 Press Release, under the above-described business environment, on July 10, 2019, H.I.S. Co., Ltd. (hereinafter referred to as “H.I.S.”) announced its implementation of a tender offer for Target Shares (hereinafter referred to as the “H.I.S. Tender Offer”). The H.I.S. Tender Offer was announced abruptly and without any notice given to the Target, and was commenced unilaterally.

<Omitted>

(II) Target’s Decision-making Process and Rationale

<Before amendment>

According to the Press Release, on July 10, 2019, H.I.S. commenced the H.I.S. Tender Offer on a unilateral basis without any prior notice or announcement to the Target and without obtaining approval from the Target. In response thereto, the Target immediately appointed various external advisors (hereinafter referred to as the “Target Outside Advisors”) as listed below and has been collecting information concerning the H.I.S. Tender Offer and H.I.S. with the advice and cooperation from such advisors, as well as evaluating and considering the H.I.S. Tender Offer.

<Omitted>

Under the aforementioned business environment surrounding the Target, on April 16, 2019, the Target laid down and announced the Mid-term Business Plan to further improve the corporate value of the Target and implemented various measures toward global growth and evolution. The Target also intends to further accelerate these measures and realize the goals set forth in the Mid-term Business Plan at an accelerated pace. The Target has determined that Fortress is fully aware of the particulars of the Target’s Mid-term Business Plan and that it has made a takeover proposal that complies with the Target’s business policies; in other words, one that will accelerate the various measures taken pursuant to the Mid-term Business Plan and aims at improving corporate value.

<Omitted>

In addition, as stated in “(II) Consultation with Independent Special Committee by Target” of “(3) Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” below, the Target consulted with the Special Committee on whether or not the Target should accept the Tender Offer and received the Special Committee’s findings report dated August 16, 2019 (hereinafter referred to as the “Findings Report”) (for an outline of the Findings Report and the specific activities of the Special Committee, please see “(II) Consultation with Independent Special Committee by Target” of “(3) Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” below.

<After amendment>

According to the August 16 Press Release, on July 10, 2019, H.I.S. commenced the H.I.S. Tender Offer on a unilateral basis without any prior notice or announcement to the Target and without obtaining approval from the Target. In response thereto, the Target immediately appointed various external advisors (hereinafter referred to as the “Target Outside Advisors”) as listed below and has been collecting information concerning the H.I.S. Tender Offer and H.I.S. with the advice and cooperation from such advisors, as well as evaluating and considering the H.I.S. Tender Offer.

<Omitted>

Under the aforementioned business environment surrounding the Target, on April 16, 2019, the Target laid down and announced the Mid-term Business Plan to further improve the corporate value of the Target and implemented various measures toward global growth and evolution. The Target also intends to further accelerate these measures and realize the goals set forth in the Mid-term Business Plan at an accelerated pace. The Target had determined that , according to the explanations made by Fortress to the Target at the time of the commencement of Tender Offer, Fortress was fully aware of the particulars of the Target’s Mid-term Business Plan and that it had made a takeover proposal that complied with the Target’s business policies; in other words, one that would accelerate the various measures taken pursuant to the Mid-term Business Plan and aimed at improving corporate value.

<Omitted>

In addition, as stated in “(II) Consultation with Independent Special Committee by Target” of “(3) Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” below, the Target consulted with the Special Committee on whether or not the Target should accept the Tender Offer and received the Special Committee’s findings report dated August 16, 2019 (hereinafter referred to as the “Findings Report”) (for an outline of the Findings Report and the specific activities of the Special Committee, please see “(II) Consultation with Independent Special Committee by Target” of “(3) Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” below.

Thereafter, the Target resolved, at the meeting of its board of directors held on September 27, 2019, to withdraw the position to approve the Tender Offer and the opinion to recommend that all shareholders tender their shares in the Tender Offer, and to withhold its position regarding the Tender Offer and the opinion on whether or not to recommend each shareholder to tender its shares in the Tender Offer. For details, please refer to the September 27 Press Release.

(3) Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer

(I) Share Valuation Report Obtained by Target from Independent Valuation Advisors

<Before amendment>

According to the Press Release, in order to eliminate the risk of arbitrariness to ensure the fairness and transparency of the decision-making process of the board of directors of the Target in considering the H.I.S. tender offer price, the Target asked KPMG, ZECOO and Benedi, each of which is a valuation advisor independent from both H.I.S. and the Target, to compute the value of the Target Shares.

Also, in order to secure the fairness of the decision-making process of the board of directors of the Target, the Target decided to refer to each of the share valuation reports obtained from KPMG, ZECOO and Benedi in connection with its consideration of the Tender Offer Price in relation to Tender Offer as well, as each of KPMG, ZECOO and Benedi is a valuation advisor independent from not only H.I.S. and the Target but also from the Tender Offeror.

The Target has not obtained a fairness opinion regarding the fairness of the Tender Offer Price. None of KPMG, ZECOO and Benedi is a related party of the Target, the Tender Offeror or H.I.S. or has any material interest to be noted in the Tender Offer.

<Omitted>

<After amendment>

According to the August 16 Press Release, in order to eliminate the risk of arbitrariness to ensure the fairness and transparency of the decision-making process of the board of directors of the Target in considering the H.I.S. tender offer price, the Target asked KPMG, ZECOO and Benedi, each of which is a valuation advisor independent from both H.I.S. and the Target, to compute the value of the Target Shares.

Also, in order to secure the fairness of the decision-making process of the board of directors of the Target, the Target decided to refer to each of the share valuation reports obtained from KPMG, ZECOO and Benedi in connection with its consideration of the Tender Offer Price in relation to Tender Offer as well, as each of KPMG, ZECOO and Benedi is a valuation advisor independent from not only H.I.S. and the Target but also from the Tender Offeror.

The Target has not obtained a fairness opinion regarding the fairness of the Tender Offer Price. None of KPMG, ZECOO and Benedi is a related party of the Target, the Tender Offeror or H.I.S. or has any material interest to be noted in the Tender Offer.

Further, it was announced that the Target has not obtained any new share valuation report of the value of the Target Shares when analyzing the Tender Offer Price based on the restructuring proposal and explanation thereof received from Fortress after the launch of the Tender Offer.

<Omitted>

(II) Consultation with Independent Special Committee by Target

<Before amendment>

According to the Press Release, the Target established a Special Committee made up entirely of five Outside Directors all of who are independent from the Target and H.I.S., based on a decision by the board of directors of the Target at a board meeting held on July 16, 2019, in order to eliminate the risk of arbitrariness and to ensure the fairness and transparency in the decision-making process of the board of directors in expressing the Target’s position regarding the H.I.S. Tender Offer.

<Omitted>

(e) Considering Items (a) through (d) above, Whether the Transaction is Appropriate

Considering that the purpose of the Transaction is legitimate, that the process of the Transaction is fair, that the consideration to be delivered to the Target’s shareholders are appropriate, and that the Transaction does not harm the interests of the minority shareholders, it is considered that the Transaction is beneficial for the enhancement of the Target’s corporate value and common interest of its shareholders.

<After amendment>

According to the August 16 Press Release, the Target established a Special Committee made up entirely of five Outside Directors all of who are independent from the Target and H.I.S., based on a decision by the board of directors of the Target at a board meeting held on July 16, 2019, in order to eliminate the risk of arbitrariness and to ensure the fairness and transparency in the decision-making process of the board of directors in expressing the Target’s position regarding the H.I.S. Tender Offer.

<Omitted>

(e) Considering Items (a) through (d) above, Whether the Transaction is Appropriate

Considering that the purpose of the Transaction is legitimate, that the process of the Transaction is fair, that the consideration to be delivered to the Target’s shareholders are appropriate, and that the Transaction does not harm the interests of the minority shareholders, it is considered that the Transaction is beneficial for the enhancement of the Target’s corporate value and common interest of its shareholders.

According to the September 27 Press Release, thereafter, the Target re-consulted with the Special Committee on September 26, 2019 regarding the appropriateness to withdraw the position to approve the Tender Offer and the opinion to recommend that all shareholders tender their shares in the Tender Offer, and to withhold its position regarding the Tender Offer and the opinion on whether or not to recommend each shareholder to tender its shares in the Tender Offer. Then, after careful discussion and examination of the consulted matters, on September 27, 2019 the Special Committee submitted to the Target the findings report dated September 27, 2019 stating that, among other things, the Special Committee considers it necessary to carefully re-examine whether the execution of the Transaction would contribute to a further increase of the common interest of shareholders and the Target’s corporate value, and whether it is appropriate to withdraw its approval of the Tender Offer and its recommendation that all shareholders tender their shares in the Tender Offer, and whether to withhold its position regarding the Tender Offer and the opinion on whether to recommend that each shareholder to tender its shares in the Tender Offer. For details, please refer to the September 27 Press Release.

(III) Advice Received by Target from Independent Law Firm

<Before amendment>

According to the Press Release, in order to eliminate the risk of arbitrariness and to ensure the fairness and transparency in the decision-making process at the meeting of its board of directors when expressing its position on the H.I.S. Tender Offer, the Target appointed TMI Associates and Nishimura & Asahi, both of which are outside legal advisors independent from both H.I.S. and the Target. Further, the Target continued to retain such law firms as its legal advisors to obtain advice regarding Japanese legal aspects of the Transaction after the proposal of the Transaction by the Tender Offeror because they are outside legal advisors independent from the Tender Offeror as well and obtained legal advice from them on the process and method for decision-making for the Transaction, as well as other points to be noted in making decisions for the Transaction and conducted careful considerations as to the Tender Offer based on such legal advice.

<Omitted>

<After amendment>

According to the August 16 Press Release, in order to eliminate the risk of arbitrariness and to ensure the fairness and transparency in the decision-making process at the meeting of its board of directors when expressing its position on the H.I.S. Tender Offer, the Target appointed TMI Associates and Nishimura & Asahi, both of which are outside legal advisors independent from both H.I.S. and the Target. Further, the Target continued to retain such law firms as its legal advisors to obtain advice regarding Japanese legal aspects of the Transaction after the proposal of the Transaction by the Tender Offeror because they are outside legal advisors independent from the Tender Offeror as well and obtained legal advice from them on the process and method for decision-making for the Transaction, as well as other points to be noted in making decisions for the Transaction and conducted careful considerations as to the Tender Offer based on such legal advice.

<Omitted>

(IV) Approval of All Directors and Opinions Stating that No Objection was Made by Audit & Supervisory Board Members of Target

<Before amendment>

According to the Press Release, the Target unanimously resolved at the meeting of the board of directors held on August 16, 2019 that it would support the Tender Offer and express its position to recommend that shareholders holding Target Shares tender their shares in the Tender Offer, based on the grounds and reasons stated in “(II) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer” of “(2) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer, and Management Policy Following Tender Offer” above.

Also, at such meeting of the board of directors, all five Audit & Supervisory Board Members of the Target attended, and all of such Members stated their opinion that they had no objection to the resolution of the board of directors to express its position to support the Tender Offer and to recommend that shareholders holding Target Shares tender their shares in the Tender Offer.

<After amendment>

According to the August 16 Press Release, the Target unanimously resolved at the meeting of the board of directors held on August 16, 2019 that it would support the Tender Offer and express its position to recommend that shareholders holding Target Shares tender their shares in the Tender Offer, based on the grounds and reasons stated in “(II) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer” of “(2) Background, Purpose and Decision-making Process Leading to Decision to Conduct Tender Offer, and Management Policy Following Tender Offer” above.

Also, at such meeting of the board of directors, all five Audit & Supervisory Board Members of the Target attended, and all of such Members stated their opinion that they had no objection to the resolution of the board of directors to express its position to support the Tender Offer and to recommend that shareholders holding Target Shares tender their shares in the Tender Offer.

According to the September 27 Press Release, thereafter the Target unanimously resolved at the meeting of its board of directors held on September 27, 2019 to withdraw its approval of the Tender Offer and its recommendation that all shareholders tender their shares in the Tender Offer, and that the target was reserving its position regarding the Tender Offer and withholding its opinion on whether to recommend that each shareholder tender its shares in the Tender Offer.

Further, it was announced that all five (5) Audit & Supervisory Board Members of the Target attended such meeting of the board of directors, and expressed their positions that there is no objection to the board of directors’ resolution to withdraw its approval of the Tender Offer and recommendation that all shareholders tender their shares in the Tender Offer, the reservation of its position regarding the Tender Offer and the withholding of its opinion on whether to recommend that each shareholder tender its shares in the Tender Offer. For details, please refer to the September 27 Press Release.

(V) Ensuring of Objective Circumstances to Secure Fairness of Tender Offer Price

<Before amendment>

According to the Press Release, following the announcement of the H.I.S. Tender Offer, the Target conducted market checks in order to improve corporate value of the Target and to secure interests of general shareholders through fair procedures, and confirmed with 16 potential bidders including Fortress, and then the Company selected four candidates and held discussions and negotiations. The Tender Offer Price was determined after conducting such Market Check as well as discussions and negotiations with Fortress. The Tender Offer Price also exceeds the H.I.S. Tender Offer Price by 900 yen.

In addition, the Tender Offeror set the period of the Tender Offer before the Change of Tender Offer Conditions as 30 business days, even though the minimum tender offer period required under law is 20 business days (Please note that the tender offer period was extended to 34 business days after the Change of Tender Offer Conditions). We intend to ensure the fairness of the Tender Offer by having a comparatively long tender offer period in order to provide the shareholders of the Target with an appropriate opportunity to consider whether or not to apply for the Tender Offer, as well as to ensure that any party other than the Tender Offeror will have an opportunity to make a competing tender offer for Target Shares. Please note that the tender offer period shall be from August 19, 2019 (Monday) to October 7, 2019 (Monday) after the Change of Tender Offer Conditions.

<After amendment>

According to the August 16 Press Release, following the announcement of the H.I.S. Tender Offer, the Target conducted market checks in order to improve corporate value of the Target and to secure interests of general shareholders through fair procedures, and confirmed with 16 potential bidders including Fortress, and then the Company selected four candidates and held discussions and negotiations. The Tender Offer Price was determined after conducting such Market Check as well as discussions and negotiations with Fortress. The Tender Offer Price also exceeds the H.I.S. Tender Offer Price by 900 yen.

In addition, the Tender Offeror set the period of the Tender Offer before the 1st Change of Tender Offer Conditions as 30 business days, even though the minimum tender offer period required under law is 20 business days (Please note that the tender offer period was extended to 34 business days after the 1st Change of Tender Offer Conditions and then to 41 business days after the 2nd Change of Tender Offer Conditions ). We intend to ensure the fairness of the Tender Offer by having a comparatively long tender offer period in order to provide the shareholders of the Target with an appropriate opportunity to consider whether or not to apply for the Tender Offer, as well as to ensure that any party other than the Tender Offeror will have an opportunity to make a competing tender offer for Target Shares. Please note that the tender offer period was from August 19, 2019 (Monday) to October 7, 2019 (Monday) after the 1st Change of Tender Offer Conditions , but thereafter changed to the period from August 19, 2019 (Monday) to October 17 (Thursday) after the 2nd Change of Tender Offer Conditions.

(4) Policy for Organizational Restructuring, Etc. after Tender Offer (Matters Regarding the So-called ‘Two-Step Acquisition’)

(I) Demand for Sale of Shares

<Before amendment>

If the Tender Offeror holds at least 90% of the total voting rights of the Target after the closing of the Tender Offer and becomes a special controlling shareholder of the Target as stipulated in Article 179, Paragraph 1 of the Companies Act (Act No. 86 of 2005, as amended; hereinafter the same), the Tender Offeror intends, promptly following the completion of settlement of the Tender Offer, to require all shareholders of the Target (excluding the Tender Offeror and the Target; hereinafter the same) to sell their Target Shares to the Tender Offeror (hereinafter referred to as “Demand for Sale of Shares”), as stipulated in Part II, Chapter 2, Section 4-2 of the Companies Act.

In a Demand for Sale of Shares, it will be provided that each one (1) common stock of Target Shares would be exchanged for cash consideration equal to the Tender Offer Price payable to the shareholders of the Target. In making such demand, the Tender Offeror will notify the Target of such fact and seek the Target’s approval of the Demand for Sale of Shares. If the Target approves the Demand for Sale of Shares by a resolution of its board of directors, then, in accordance with the procedures under applicable law, and without the consent of the individual shareholders of the Target, the Tender Offeror will acquire all of Target Shares held by the shareholders of the Target on the date of acquisition stipulated by the Demand for Sale of Shares. Then, the Tender Offeror will deliver to each such shareholder an amount of cash consideration per share held by such shareholder equal to the Tender Offer Price. In addition, according to the Press Release, if the Target receives a notice from the Tender Offeror regarding its intention to make a Demand of Sale of Shares and the matters stipulated in each Item of Article 179-2, Paragraph 1 of the Companies Act, the Target intends to approve such demand at the meeting of its board of directors. In the case where a Demand for Sale of Shares is made, the shareholders of the Target will be able to file a petition with the court for a determination of the sale price for their Target Shares, in accordance with Article 179-8 of the Companies Act and other applicable laws and regulations.

<After amendment>

If the Tender Offeror holds at least 90% of the total voting rights of the Target after the closing of the Tender Offer and becomes a special controlling shareholder of the Target as stipulated in Article 179, Paragraph 1 of the Companies Act (Act No. 86 of 2005, as amended; hereinafter the same), the Tender Offeror intends, promptly following the completion of settlement of the Tender Offer, to require all shareholders of the Target (excluding the Tender Offeror and the Target; hereinafter the same) to sell their Target Shares to the Tender Offeror (hereinafter referred to as “Demand for Sale of Shares”), as stipulated in Part II, Chapter 2, Section 4-2 of the Companies Act.

In a Demand for Sale of Shares, it will be provided that each one (1) common stock of Target Shares would be exchanged for cash consideration equal to the Tender Offer Price payable to the shareholders of the Target. In making such demand, the Tender Offeror will notify the Target of such fact and seek the Target’s approval of the Demand for Sale of Shares. If the Target approves the Demand for Sale of Shares by a resolution of its board of directors, then, in accordance with the procedures under applicable law, and without the consent of the individual shareholders of the Target, the Tender Offeror will acquire all of Target Shares held by the shareholders of the Target on the date of acquisition stipulated by the Demand for Sale of Shares. Then, the Tender Offeror will deliver to each such shareholder an amount of cash consideration per share held by such shareholder equal to the Tender Offer Price. In addition, according to the September 27 Press Release, the Target continues to examine what position to take in the event that it receives a notice from the Tender Offeror regarding its intention to make a Demand of Sale of Shares and the matters stipulated in each Item of Article 179-2, Paragraph 1 of the Companies Act if and when the Tender Offer has been successfully completed. In the case where a Demand for Sale of Shares is made, the shareholders of the Target will be able to file a petition with the court for a determination of the sale price for their Target Shares, in accordance with Article 179-8 of the Companies Act and other applicable laws and regulations.

(II) Share Consolidation

<Before amendment>

Alternatively, if the Tender Offeror holds less than 90% of the total voting rights in the Target after the closing of the Tender Offer, the Tender Offeror intends to request that the Target perform the consolidation of Target Shares pursuant to Article 180 of the Companies Act (hereinafter referred to as “Share Consolidation”) and to hold an extraordinary meeting of shareholders (hereinafter referred to as the “Extraordinary Shareholders Meeting”) for, among purposes, the amendment of the Target’s articles of incorporation to abolish the provisions as to share unit number conditional upon coming into effect of Share Consolidation. The timing, etc. of holding of the Extraordinary Shareholders Meeting will be determined through consultation between the Tender Offeror and the Target, and once determined, will be announced by the Target without delay. The Tender Offeror intends to approve each of the above-mentioned proposals at the Extraordinary Shareholders Meeting.

<Omitted>

In each of the foregoing cases, the Target will announce specific details and expected timing, etc. promptly once they are determined through consultation between Fortress and the Target.

Please note that each of the shareholders of the Target should, as a matter of its own responsibility, confirm with taxation experts with respect to the tax consequences of participating in the Tender Offer or any of the foregoing procedures.

<After amendment>

Alternatively, if the Tender Offeror holds less than 90% of the total voting rights in the Target after the closing of the Tender Offer, the Tender Offeror intends to request that the Target perform the consolidation of Target Shares pursuant to Article 180 of the Companies Act (hereinafter referred to as “Share Consolidation”) and to hold an extraordinary meeting of shareholders (hereinafter referred to as the “Extraordinary Shareholders Meeting”) for, among purposes, the amendment of the Target’s articles of incorporation to abolish the provisions as to share unit number conditional upon coming into effect of Share Consolidation. According to the September 27 Press Release, the Target remains to examine the position to take in the event that it receives such request from the Tender Offeror. The Tender Offeror intends to approve each of the above-mentioned proposals at the Extraordinary Shareholders Meeting.

<Omitted>

According to the September 27 Press Release, the Target remains to examine the position to take in the event that it receives said request from the Tender Offeror in each of the foregoing cases.

Please note that each of the shareholders of the Target should, as a matter of its own responsibility, confirm with taxation experts with respect to the tax consequences of participating in the Tender Offer or any of the foregoing procedures.

2. Outline of Tender Offer

(2) Schedule, Etc.

(II) Anticipated Tender Offer Period at the time of filing of the Notification

<Before amendment>

From August 19, 2019 (Monday) to October 7, 2019 ( Monday ) ( 34 business days)

<After amendment>

From August 19, 2019 (Monday) to October 17, 2019 ( Thursday ) ( 41 business days)

(8) Settlement Method

(II) Commencement Date of Settlement

<Before amendment>

October 15, 2019 ( Tuesday )

<After amendment>

October 25, 2019 ( Friday )

4. Others

(1) Agreements Between Tender Offeror and Target or its Officers and Details Thereof

(I) Agreements Between Tender Offeror and Target and Details Thereof

<Before amendment>

According to the Press Release, at the meeting of its board of directors held on August 16, 2019, the Target adopted a resolution to support the Tender Offer and to recommend that shareholders holding Target Shares tender their shares in the Tender Offer. For details of the resolution of such meeting of the board of directors of the Target, please refer to the Press Release, as well as “(IV) Approval of All Directors and Opinions Stating that No Objection was Made by Audit & Supervisory Board Members of Target” of “(3) Measures to Ensure Fairness of Tender Offer Prices and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” of “1. Purpose, Etc. of Tender Offer, Etc.” above.

<Omitted>

<After amendment>

According to the August 16 Press Release, at the meeting of its board of directors held on August 16, 2019, the Target adopted a resolution to support the Tender Offer and to recommend that shareholders holding Target Shares tender their shares in the Tender Offer. For details of the resolution of such meeting of the board of directors of the Target held on August 16, 2019, please refer to the August 16 Press Release, as well as “(IV) Approval of All Directors and Opinions Stating that No Objection was Made by Audit & Supervisory Board Members of Target” of “(3) Measures to Ensure Fairness of Tender Offer Prices and Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” of “1. Purpose, Etc. of Tender Offer, Etc.” above. In addition, according to the September 27 Press Release, the Target resolved, at the meeting of its board of directors held on September 27, 2019, to withdraw its approval of the Tender Offer and its recommendation that all shareholders tender their shares in the Tender Offer, and that the Target was reserving its position regarding the Tender Offer and withholdings its opinion on whether to recommend each shareholder tender its shares in the Tender Offer. For details of the resolution of such meeting of the board of directors of the Target held on September 27, 2019, please refer to the September 27 Press Release.

<Omitted>

End

- This press release is made for the purpose of publicly announcing the Tender Offer and not for the purpose of soliciting an offer to sell nor offering to purchase any securities in the Tender Offer. Any shareholder who intends to apply for the sale, etc. of any securities should make sure to act at its own discretion after reviewing the Tender Offer Explanation Statement as to the Tender Offer. This press release does not constitute a solicitation of sale of, or an offer for purchase of, any securities, nor a part thereof, and neither this press release (or a part thereof) nor the delivery thereof shall provide a basis for any agreement for the Tender Offer and may be relied upon for executing any such agreement.

 

- The Tender Offer is conducted to purchase common stock of the Target, a corporation incorporated in Japan. Although the Tender Offer will be conducted in accordance with the procedures and information disclosure standards prescribed in the Financial Instruments and Exchange Act, these procedures and standards may differ from the procedures and standards in the United States. In particular, Sections 13(e) and 14(d) of the U.S. Securities Exchange Act of 1934, as amended, and the rules prescribed thereunder do not apply to the Tender Offer, and the Tender Offer does not confirm to those procedures and standards. All of the financial information contained in this press release is based on Japanese accounting standard, not U.S. accounting standards, and may not necessarily be comparable to financial information based on U.S. accounting standards. Further, it may be difficult to enforce any right or demand arising under U.S. federal securities laws, because both of the Tender Offeror and the Target are incorporated outside the United States and none of its officers are U.S. residents. It may be impossible to sue a company outside the United States and its officers in a non-U.S. court for a violation of the U.S. Securities laws. Furthermore, there is no guarantee that one would be able to compel a company outside the United States or its subsidiaries and affiliated parties to subject themselves to the jurisdiction of a U.S. court.

 

- Unless otherwise specified, all procedures relating to the Tender Offer shall be conducted in Japanese language. If some of the documents relating to the Tender Offer are prepared in English language and if there is any inconsistency between the English version and the Japanese version, the Japanese version shall prevail.

 

- This press release contains “forward-looking statements” as defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934. Known or unknown risks, uncertainties and other factors could cause actual results to substantially differ from the projections and other matters expressly or impliedly set forth herein as “forward-looking statements.” Neither the Tender Offeror nor the Target, nor any of their respective affiliated parties, assumes that such express or implied projections, etc. set forth herein as “forward-looking statements” will eventually prove to be correct. The “forward-looking statements” contained in this press release have been prepared based on the information held by the Tender Offeror and the Target as of the date hereof and, unless otherwise required under applicable laws and regulations, neither the Tender Offeror nor the Target, nor any of their respective affiliated parties, assumes any obligation to update or revise this press release to reflect any future events or circumstances.

 

- There is a possibility that the Tender Offeror, any of the Target’s financial advisors or the tender offer agent (including their respective related parties) may conduct purchases of common stock of the Target not under the Tender Offer for its or their own account or on the account of its or their clients, or may take any action toward such purchase, prior to the commencement of the Tender Offer or during the tender offer period, in the ordinary course of business in accordance with the requirements under Article 5(b) of Rule 14(e) of the U.S. Securities Exchange Act of 1934, to such extent as is permitted by Japanese legislation related to financial instruments transactions and other applicable laws and regulations.

 

 

CONTACT: Fortress Investment Group (Japan) GK

Tel: +81-3-6438-4400

KEYWORD: JAPAN ASIA PACIFIC

INDUSTRY KEYWORD: PROFESSIONAL SERVICES COMMERCIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY FINANCE BANKING

SOURCE: Sapporo GK

Copyright Business Wire 2019.

PUB: 10/02/2019 04:35 PM/DISC: 10/02/2019 04:35 PM

Copyright Business Wire 2019.