In my note on the eve of the deadline, I framed Soft99’s two-way tender offer as a live experiment. Two prices, two futures: a management-led MBO at ¥2,680 aiming to take the company private, and Effissimo’s counter-bid at ¥4,100 promising governance change while keeping the listing. The “decisive arithmetic” was simple: Effissimo’s group minimum acceptance was lower than the MBO’s, Effissimo’s price was much higher, and both tenders placed no upper limit on shares accepted. Logically, the MBO should fail.
The result reflected exactly that. Effissimo’s vehicle collected 6,767,917 shares (31.34% of the ex-treasury base), lifting the group to 36.14% and securing a durable veto over special resolutions. Management’s MBO, by contrast, drew only 5,601,461 shares, roughly 26%, and missed its minimum so, no shares were purchased and the take-private attempt collapsed.
The first question from the earlier piece: “Would sellers converge on the higher, unconstrained bid?” was answered clearly. Enough did to meet Effissimo’s minimum and shut the door on the MBO’s delisting ambitions. On price and closing mechanics, the market behaved as a finance textbook would predict.
The second question was about those who would not take the higher bid: “How would “non-tender” holders explain standing pat at a lower price?” Here, the most telling move came from outside the formal non-tender block. KeePer, a major shareholder, began in the MBO camp under a tender agreement, then publicly reversed course and resolved to tender all its 2.68 million shares into Effissimo’s offer. That pivot, justified in stewardship terms after much consideration by KeePer the board, undercut the idea that loyalty or relationships could trump a 50% higher price indefinitely. So, although the non-tender block was steadfast, KeePer’s move is a great example of corporate Japan’s shift towards the concept of stewardship.
The third question asked whether long-term strategy narratives could sway investors who would not be shareholders after settlement. On one level, the answer is “not really”: the economically superior exit carried the day, and Soft99 stays listed with a new cornerstone shareholder. Yet it is striking that about a quarter of tender-eligible shares still lined up behind the lower-priced MBO at the deadline.
Participation overall was exceptionally high. Between tenders to one side or the other and the insiders’ non-tender commitments, close to ninety percent of the register was effectively participating. This is an encouraging demonstration that Japanese shareholders are increasingly engaged. At the same time, the sizeable constituency that chose the lower bid reminds us that emotion, sentiment, deference to board recommendations, and relationship capital still carry weight. This is surprising in a process that, due to the finality of both tenders, for sellers, should purely be about cash today, not strategy tomorrow of a company with which they will have no ongoing connection.
Through Soft99, we glimpse a market where the head is becoming more dominant, but the heart has not disappeared. Logic decided the outcome, but culture and emotion still left a large footprint.
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