Private Equity: Hong Kong Private Equity Firm Proposes $1.4 Billion Counter Offer

Buyout private equity firm Baring Private Equity has recently made an offer to buy Japanese nursing home operator Nichiigakkan.  Nichiigakkan has already agreed to Bain Capital’s $1.2 billion offer, but Baring claims to value the nursing home operator at 146 billion yen, or $1.37 billion USD.  

Nichiigakkan shares closed at 1,698 yen and had risen nearly five percent before rising another two percent.  Bain Capital’s offer is now under pressure.  The firm’s choices are to lose the offer or increase its offer.  According to Baring Private Equity, “BPEA has sent letters to certain members of Nichiigakkan’s founding family, offering to evaluate assisting with a management buyout as well as a tender offer for all outstanding ordinary shares and share acquisition rights of Nichiigakkan.”  

Hong Kong-based Lim Advisors requested Nichiigakkan management to extend Bain’s offer.  They claimed the company’s fair value is 2,400 yen per share.  Lim Advisors currently holds a stake in the company.  

Baring Private Equity is a private equity firm based in Hong Kong.  The company has approximately $10 billion assets under management.  Baring runs a pan-Asian investment program that aims to grow companies through buyouts.  The firm currently has 41 portfolio companies across Asia.