Kakaku’s $5 Billion Deal Faces Higher Proposal From Bain and LY

Key Facts

The approximately $5 billion takeover of Japan’s Kakaku.com faces competition between an existing offer from EQT and a higher-priced proposal from Bain Capital and LY Corp, a SoftBank Group subsidiary, according to a Reuters report published by WSAU. EQT extended its offer on Wednesday for the tenth time, setting November 12 as the deadline for shareholders to accept a price of 3,683 yen per share. Bain and LY’s proposal is for 3,700 yen per share, rising to 3,720 yen if the two parties secure support from KDDI, Kakaku’s third-largest shareholder. But the competing proposal has not yet become a formal tender offer, as it requires approval from Kakaku’s board before launch. The next step therefore rests with the board, while the company’s shareholders face EQT’s existing offer and its set deadline.

EQT launched its offer in May, then Bain entered the contest in partnership with LY, setting off a six-month bidding war in which EQT raised its price seven times, the report said. LY and Bain submitted an initial proposal on May 13 at an assumed price of 3,232 yen per share, before raising it to 3,700 yen on Monday. The gap between that proposal and EQT’s latest price reflects how closely contested the race is, while the higher price of 3,720 yen remains conditional on KDDI’s position. In July, EQT had raised its offer to 3,450 yen per share from 3,000 yen, in a deal then valued at about 682.55 billion yen, or $4.20 billion. Digital Garage said in June that it did not intend to accept Bain and LY’s proposal and would continue working to complete the deal as part of its alliance with EQT.

Bain and LY’s case centers on the possibility of combining LY’s internet services with Kakaku’s businesses, which include the price-comparison site Kakaku.com and restaurant-review platform Tabelog.com. LY’s businesses include the LINE messaging app and the Yahoo Japan portal, and the company said it sees opportunities to integrate those services with SoftBank’s PayPay digital payments ecosystem. LY also said Kakaku’s businesses, data and frequent customer touchpoints have high strategic value amid the rise of generative AI. This business overlap places the proposal in the context of a strategic buyer seeking to bring together interconnected digital services, alongside the financial competition over the takeover price. KDDI’s support matters because the proposal’s conditional price depends on securing this shareholder’s backing, while the launch of Bain and LY’s offer remains subject to Kakaku board approval.

The contest reflects, according to the Reuters report, a rise in Japanese deals attracting competition from private equity funds and strategic buyers, in a market that has seen activity in sponsor-backed transactions. The value of private equity-sponsored mergers and acquisitions reached $24 billion between January and September, nearing the total for the same period a year earlier and roughly double the $13 billion recorded in the corresponding period of 2024. Yusuke Watanabe, a partner at Carlyle, said companies operating in the same sector may see greater growth opportunities in target companies than standalone funds do, adding that “this trend is likely to push final bid prices higher.” Akihiko Manaka, co-head of investment banking and M&A in Japan at Bank of America, said that “competition is naturally intense when assets are good and companies are sought after by everyone, making it difficult to buy them at a low price.” The previous year, KKR outbid Bain in the Fuji Soft deal, which valued the software company at about $4.1 billion.

Kakaku shares closed Wednesday at 3,747 yen, above both EQT’s offer price of 3,683 yen and Bain and LY’s base price of 3,700 yen. The Reuters report said the close indicates that market participants see the possibility of further price increases. This comes as EQT’s offer remains open through November 12, the deadline for shareholders to tender their shares at the latest price. Bain and LY’s next step depends on approval from Kakaku’s board, while the higher price of 3,720 yen is conditional on KDDI’s support. These deadlines and approvals will determine whether the competing proposal becomes a formal offer before EQT’s deadline expires.