Asatsu-DK Inc is Japan’s third largest advertising agency. Bain has stated it will step away from its bid if it fails to acquire a stake larger than 50.1% in the company.
In what could potentially be one of Japan’s largest buyouts this year, Bain Capital, a U.S. private equity firm disclosed it purchase Asatsu-DK Inc, Japan’s third-largest advertising agency, for $1.35 billion (152 billion yen).
On Monday, Bain said it plans on buying all of Asatsu-DK’s shares from existing shareholders, including top shareholder WPP for 3,660 yen a share, which represents a 15.4% premium over Monday’s close.
As per the private equity firm, it will launch a tender offer on Tuesday, and plans to delist the company. It went on to add, the buyout will be canceled if it fails to buy a stake larger than 50.1% in the company.
The development comes just days after its consortium signed a $18 billion deal to buy Toshiba Corp’s NAND chip business.
Presently, WPP, the world’s largest advertising group, has a 24.96% share in Asatsu-DK.
In a statement, Asatsu-DK said it has requested WPP to terminate the capital alliance it made with WPP in 1998, under which Asatsu-DK and WPP set up joint ventures and cultivate clients together.
It isn’t clear whether WPP will sell all of its stake in Asatsu-DK upon request, said Shinpei Ishida, a department director of the president’s office at Asatsu-DK.
“Looking back over the past two decades, we made a certain achievement at the initial stage…,” said Asatsu-DK in reference with its alliance with WPP.
“Since then we failed to find concrete measures that could be beneficial for both of us. We also failed to create synergies through our collaboration.”
($1 = 112.7900 yen)