June 16, 2020 / 7:41 AM / 2 months ago

UPDATE 1-Lim presses Nichiigakkan for extension in Bain's $1 bln offer

(Adds Lim quote, details, background, no comment from Nichiigakkan)

By Junko Fujita

TOKYO, June 16 (Reuters) - Investment fund Lim Advisors is pressing Nichiigakkan Co’s management to extend the offer deadline of Bain Capital’s $1 billion buyout of the Japanese nursing home operator, according to a letter to Nichiigakkan’s management.

Hong-Kong based Lim is also asking Nichiigakkan to publicly debate the process of the tender offer and demanding that the Japanese company’s special committee, set up to gauge the fairness of the transaction, hire its own financial and legal adviser, according to the letter dated June 15 and reviewed by Reuters.

“We request you to demand an extension of the tender offer period, so that minority shareholders can have more time to properly consider the issues,” the letter said.

The offer is set to expire June 22.

Lim is the latest investor to pressure a private equity firm to raise its offer price for a Japanese company amid a government push for better corporate governance, with boards increasingly expected to seek better returns for minority shareholders.

Bain last year failed to buy Japanese printing firm Kosaido Co after being challenged by a Japanese activist investor who said Bain’s offer was too low.

Lim said the fairness of the tender offer process was important because Nichiigakkan’s board is dominated by members who have agreed to tender their shares to Bain. The head of Bain Capital’s Japanese operations, Yuji Sugimoto, sits on the board, Lim added.

Nichiigakkan spokeswoman Namiko Ueno declined to comment.

Lim, which has not disclosed the size of its stake, previously said Bain’s offer “substantially” undervalued the company and appeared to take advantage of COVID-19 related weakness in the share price.

Lim has said Nichiigakkan’s fair price is around 2,400 yen ($22.35) a share, compared with Bain’s offer of 1,500 yen. The stock rose 1.4 % to 1,622 yen on Tuesday. ($1 = 107.3700 yen) (Reporting by Junko Fujita; Editing by Chris Gallagher and)

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