LY Corp and Bain Capital raise $4 billion bid for Kakaku.com in takeover duel

SoftBank’s LY Corp, in partnership with Bain Capital, has increased its cash tender offer for Kakaku.com to 3,232 yen per share, valuing the digital services operator at approximately $4 billion. The revised bid, announced on Thursday, represents a 7.7 per cent uplift from the consortium’s previous offer of 3,000 yen per share and exceeds the valuation of a rival proposal from Swedish investment firm EQT.

LY Corp cited the “extremely high strategic value” of Kakaku’s businesses, particularly in the context of generative artificial intelligence, as a key driver for the increased bid. The company, which owns the Line messaging application and Yahoo Japan, structured the proposal as an all-cash deal. The move intensifies the competition for the operator of the Kakaku.com price comparison website, the Tabelog restaurant review platform, and the Kyujin Box job search service.

EQT, which launched its tender offer on Wednesday with the unanimous backing of Kakaku’s board, maintains confidence in its 3,000 yen per share proposal. A spokesperson for the Swedish firm stated that its offer provides execution certainty, relevant sector expertise, and a long-term perspective to support the company’s next phase of growth. Despite the higher valuation from LY, EQT remains committed to taking the business private.

Market reaction suggests the bidding war may continue. Kakaku.com shares rose 0.7 per cent to 3,450 yen in afternoon trade, while LY Corp shares fell 2.2 per cent. The divergence in share performance indicates that investors anticipate further competition, even as major shareholders Digital Garage and KDDI, who collectively hold 38.1 per cent of Kakaku, have agreed to sell their shares in the EQT tender offer.

The transaction occurs against a backdrop of increasing activity from overseas investors in Japanese markets, driven by governance reforms that encourage firms to rethink capital structures. While the Japanese government encourages mergers and acquisitions, authorities are also increasing scrutiny of deals involving foreign acquirers. Companies are not obliged to accept unsolicited takeover bids, even when offered significant premiums, leaving the final outcome of this contest uncertain.