SBI HOLDINGS, INC.
December 11, 2014
SBI Holdings, Inc. (TOKYO: 8473)
SBI Holdings, Inc. ("SBIH") hereby announces that it has decided to enter into a tender offer agreement in response to a plan by LL Holdings, Inc. (hereinafter the "Tender Offeror"), which belongs to a fund to which Advantage Partners, LLP offers services (hereinafter the "AP Fund"), to start its tender offer (hereinafter the "Tender Offer") on December 12, 2014. This tender offer is for purchasing the shares, etc. of SBI Life Living Co., Ltd. (hereinafter "SBI Life Living"), which is a consolidated subsidiary of SBIH listed on the TSE Mothers market. Under the tender offer agreement, SBIH will subscribe to the tender offer of all the
8,515,000 shares that it owns.
1. Reason for subscribing to the Tender Offer
Before becoming a consolidated subsidiary of SBIH by means of share acquisition in September 2007, SBI Life Living provided the services related to development, sales, planning and design of investment properties as a company listed on the TSE Mothers market (former corporate name: Living Corporation Co., Ltd.; Changed to the current corporate name in July 2009). In July 2009, SBI Life Living took over the Internet business from SBIH. It currently conducts the real estate business (development, sales, brokerage, etc. of "Branche" series (rental designer condominiums) and apartments for investors) and the Internet business including the "Ticket Distribution Center."
The SBI Group currently focuses on the three core businesses - Financial Services, Asset Management, and Biotechnology-related Business, and has actively sold other businesses. As for Financial Services Business, the SBI Group has a basic policy to center on securities, banking and insurance as its three core businesses. It also focuses on other businesses that can generate synergies with one of these core businesses. The SBI Group is currently promoting "Selection and Concentration" of its businesses and the generation of cash flows (e.g. sale of SBI Veri Trans Inc., (currently VeriTrans Inc.) in March 2012 and SBI Mortgage Co., Ltd. in August
2014).
Under these circumstances, SBIH, a parent company of SBI Life Living, received a tender offer proposal from AP Fund for the purchase of SBI Life Living's shares, and has conducted relevant negotiations with AP Fund that conducts private equity investment business. AP Fund proposed the privatization of SBI Life Living. More specifically, AP Fund proposed to make SBI Life Living a wholly-owned subsidiary of the Tender Offeror and to give support to SBI Life Living as a new partner for future business development. The tender offer price that AP Fund presents is JPY 1,070 per share, which is considered a premium price (i.e.
6.8% against JPY 1,002 that is the closing price of SBI Life Living's common stock at TSE on December 10,
2014 (the day before the tender offer announcement date), 12.4% against JPY 951.6 that is the average closing price for the past one month, 22.7% against JPY 872.3 that is the average closing price for the past three months, and 35.3% against JPY 790.8 that is the average closing price for the past six months (by rounding the prices to one decimal place)). As a result, SBIH has decided to subscribe to the Tender Offer of all the shares of SBI Life Living that it owns.
Upon completion of the Tender Offer, SBIH is scheduled to invest JPY 995 million (investment ratio: 19.9%) in the Tender Offeror in terms of common shares, and is also planning to continue providing support to AP Fund in further enhancing SBI Life Living's corporate value by using the SBI Group's brand and business base.
2. Outline of SBI Life Living (as of September 30, 2014)
(1) Name | SBI Life Living Co., Ltd. |
(2) Address | 1-14-6 Dougenzaka, Shibuya-ku, Tokyo |
(3) Title/name of representative | Shiho Aihara, Representative Director, President and CEO |
(4) Business | 1. Pre-development planning and design of investee real estate |
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2. Developing and selling investee real estate 3. Proposing useful means of land use and contracting construction etc. 4. Internet-based EC and mediation services websites 5. Composition and fee estimate services websites | |||
(5) Capital | JPY 524 million | ||
(6) Date of establishment | February 28, 1990 | ||
(7) Major shareholder and shareholding ratio | SBI Holdings, Inc. | 67.60% | |
(7) Major shareholder and shareholding ratio | CHASE MANHATTAN BANK GTS CLIENTS ACCOUNT ESCROW (Standing proxy: Mizuho Bank, Ltd.) | 2.01% | |
(7) Major shareholder and shareholding ratio | Shuichi Miwa | 1.68% | |
(7) Major shareholder and shareholding ratio | Japan Trustee Services Bank, Ltd. (Trust account) | 1.58% | |
(7) Major shareholder and shareholding ratio | JAPAN SECURITIES FINANCE CO., LTD. | 1.11% | |
(7) Major shareholder and shareholding ratio | Hiroyuki Yoshioka | 0.77% | |
(7) Major shareholder and shareholding ratio | BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE- AC) (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd) | 0.77% | |
(7) Major shareholder and shareholding ratio | Trust & Custody Services Bank, Ltd. (Security investment trust account) | 0.62% | |
(7) Major shareholder and shareholding ratio | Takeichi Imai | 0.60% | |
(7) Major shareholder and shareholding ratio | Toshimitsu Masuda | 0.48% | |
Relationship between the (8) listed company and SBI Life Living | Capital relationship | SBIH owns 67.60% of the total number of issued shares of SBI Life Living. | |
Relationship between the (8) listed company and SBI Life Living | Personal relationship | SBIH's director is concurrently serving as an executive of SBI Life Living, and also employees are temporarily transferred. | |
Relationship between the (8) listed company and SBI Life Living | Business relationship | SBIH is subleasing offices to SBI Life Living. | |
(9) Business results and financial conditions of SBI Life Living in the previous three years | |||
Fiscal Year Ended | March 31, 2012 (Consolidated) | March 31, 2013 (Non-consolidated) | March 31, 2014 (Non-consolidated) |
Net assets | JPY 2,846,285 thousand | JPY 3,370,268 thousand | JPY 4,357,744 thousand |
Total assets | JPY 8,712,052 thousand | JPY 8,154,109 thousand | JPY 8,983,906 thousand |
Net assets per share | JPY 227.38 | JPY 293.73 | JPY 375.33 |
Operating revenue | JPY 5,677,267 thousand | JPY 6,066,602 thousand | JPY 7,345,845 thousand |
Operating income | JPY 744,895 thousand | JPY 1,106,243 thousand | JPY 1,570,255 thousand |
Ordinary income | JPY 646,391 thousand | JPY 1,024,241 thousand | JPY 1,510,537 thousand |
Net income | JPY 644,949 thousand | JPY 675,516 thousand | JPY 906,357 thousand |
Net income per share | JPY 51.67 | JPY 55.03 | JPY 78.35 |
Dividend per share | - | - | - |
* Since SBI Life Living's absorption-type merger of its consolidated subsidiary was conducted on March 31,
2012, SBI Life Living has not prepared its financial statements on a consolidated basis for the corresponding consolidated fiscal year. Therefore, the figures of net assets, total assets and net assets per share for the fiscal year ended March 31, 2012 are non-consolidated results.
3. Outline of the company that will be purchasing shares (as of December 11, 2014)
(1) Name | LL Holdings, Inc. |
(2) Address | 1-28, 4-chome, Toranomon, Minato-ku, Tokyo |
(3) Title/name of representative | Shinichiro Kita, Representative Director |
(4) Business | Investments |
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(5) Capital | JPY 50 thousand * The amount of capital is planned to increase by JPY 2,497,450 thousand, due to the investment of JPY 3,999,900 thousand from AP Fund and JPY 995,000 thousand from SBIH, by the settlement start date. | |
(6) Date of establishment | September 30, 2014 | |
(7) Net assets | JPY 50 thousand | |
(8) Total assets | JPY 50 thousand | |
(9) Major shareholder and shareholding ratio | Advantage Partners, LLP. IV-S | 100.00% |
Relationship between the (10) listed company and LL Holdings | Capital relationship | None |
Relationship between the (10) listed company and LL Holdings | Personal relationship | None |
Relationship between the (10) listed company and LL Holdings | Business relationship | None |
Relationship between the (10) listed company and LL Holdings | Status of relationship with related parties | None |
4. Number of shares for subscription, price, and the status of shares held before and after subscription
(1) Number of shares held before subscription (consolidated basis) | 8,515,000 shares (Number of voting rights: 85,150) (Ownership ratio of voting rights: 73.27%) |
(2) Scheduled number of shares for subscription (consolidated basis) | 8,515,000 shares (Number of voting rights: 85,150) (Share transfer price: JPY 9,111 million (JPY 1,070 per share)) |
(3) Number of shares held after subscription (consolidated basis) | 0 shares (Number of voting rights: 0) (Ownership ratio of voting rights: 0.00%) |
5. Date of the Tender Offer
(1) Conclusion of tender offer agreement | December 11, 2014 |
(2) Period of purchase | From December 12, 2014 to February 2, 2015 |
(3) Date of result announcement | February 3, 2015 |
(4) Settlement start date | February 9, 2015 |
6. Future outlook
If the Tender Offer is successful, SBI Life Living will no longer be a consolidated subsidiary of SBIH as a result of subscribing to the Tender Offer. Meanwhile, the impact of subscribing to the Tender Offer on SBIH's consolidated financial results for the fiscal year ending March 31, 2015 will be immaterial.
**************************************************************************************** For further information, please contact:
SBI Holdings, Inc. Corporate Communications Dept., Tel: +81 3 6229-0126
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