Kobayashi Pharmaceutical is reportedly considering a take-private proposal from a Japan-UK fund consortium, with the total acquisition value potentially reaching around ¥500 billion.
Kobayashi Pharmaceutical (4967.T) is considering taking the company private, according to interviews with several people familiar with the matter. The Japan Industrial Promotion Organization and CVC Capital Partners, a Japan-UK fund consortium, have proposed acquiring the company through a tender offer. If realized, the deal would put the company’s management restructuring, prompted by the health problems associated with its red yeast rice supplements, under the funds’ ownership.
Kobayashi Pharmaceutical’s market capitalization was ¥459.3 billion based on its closing share price on the 24th. The total acquisition value could be around ¥500 billion, and the founding family is also believed to be considering an investment.
The aim of taking the company private is to move away from short-term market pressure and implement long-term measures to prevent a recurrence, as well as governance reforms. Chairman Kazumasa (一雅) and President Akihiro (章浩), both from the founding family, continue to be involved in management after resigning to take responsibility.
The focus going forward will be whether the tender offer price provides existing shareholders with a sufficient premium. The actions of activist shareholders, the founding family’s investment ratio and the board’s decision could all have an impact. The company has not issued an official comment as of now.