PE Giants Clash in Rare Public Fight Over Japanese Tech Firm, FT Reports

What's happening: In an unprecedented public battle reported by the Financial Times, private equity heavyweights KKR and Bain Capital are locked in a $4 billion takeover fight for Japanese IT services company Fuji Soft, breaking the industry's unspoken rule of keeping conflicts private.

Why it matters:

• Market precedent: This rare public dispute could reshape how global PE firms compete for Japanese assets and potentially boost returns for minority investors

• Regulatory impact: Japanese regulators note the competition is driving up prices, potentially setting new standards for corporate valuations

• Industry norms: The public nature of this conflict challenges traditional PE industry practices of behind-the-scenes dealmaking

The key moves:

• Strategic stakes: KKR secured over one-third of Fuji Soft's shares from activist investors, creating a potential blocking position

• Counter play: Bain aligned with Fuji Soft's founding family and launched a higher bid without board approval

• Escalation: Both firms have publicly accused each other of unfair tactics and bad faith bidding

By the numbers:

• Valuation gap: Bain's offer stands at ¥9,600 per share vs. KKR's ¥9,451

• Property portfolio: Hidden assets valued at upward of $1 billion

• Current trading: Shares trading around ¥9,800, suggesting market expects higher bids

Key players:

• KKR: Has blocking stake, claims activist investor influence

• Bain Capital: Backed by founding family, offering higher price

• Fuji Soft board: Repeatedly rejected Bain's higher bids, citing KKR's blocking stake

• Activist investors: 3D Investment Partners and Farallon Capital Management, who sold to KKR

The wrap: This unprecedented public battle between PE giants over a mid-tier Japanese IT firm signals a potential shift in how global private equity operates in Japan. With both firms planning tender offers in early February, the outcome could establish new precedents for corporate takeovers in Japan while testing the limits of traditional PE industry cooperation.