July 31, 2020 / 10:24 AM / 8 days ago

UPDATE 1-Bain Capital sweetens terms for Japan's Nichiigakkan with Effissimo support

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By Junko Fujita

TOKYO, July 31 (Reuters) - Bain Capital on Friday sweetened its terms for a $1 billion buyout of Japanese nursing home company Nichiigakkan Co as it gained support from activist fund Effissimo Capital Management.

Bain Capital in May launched a public offer to buy Tokyo-based Nichiigakkan but it kept extending deadlines for the bid as the stock traded higher than Bain's offer.

The U.S. buyout fund said it had raised the offer price to 1,670 yen per share from 1,500 yen. The revised offer valued the company at 122 billion yen ($1.2 billion).

Bain Capital also said Singapore-based Effissimo Capital Management, which owns a 12.46% stake in Nichiigakkan, has agreed to tender its shares to Bain.

Effissimo would hold an undisclosed stake in a vehicle that would indirectly owns Nichiigakkan, Bain said.

Bain had already secured a 44% stake from Nichiigakkan's top management and founding family members.

Hong Kong-based investment fund Lim Advisors has said Bain's offer "substantially" undervalued the company and appeared to take advantage of novel coronavirus-related weakness in the share price.

Nichiigakkan shares closed at 1,540 yen on Friday. ($1 = 104.6400 yen) (Reporting by Junko Fujita Editing by Edmund Blair, Robert Birsel)

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