The Digital Holdings tender offer: buying the company after losing on price (2025)

What it means to buy out from the losing side of a price contest

The ¥2,015 per share that Hakuhodo DY finally offered does not reach SilverCape Investments’ ¥2,450. That it succeeded anyway appears to be because, instead of bidding the price up, it dropped the minimum number of shares it required from a 40.55% ownership ratio to 24.67% and took the route of proceeding to subsidiarization without holding a majority. A design under which the founder side’s asset-management company’s 4,921,000 shares would be acquired separately once the offer succeeded is what made that reduction possible. The party that names the higher price does not necessarily get to buy.

Tenders, however, came to only 24.8%. Most general shareholders other than the founder side, watching a rival offering a higher price, did not accept Hakuhodo DY’s proposal. What it obtained was 51% of the shares and the integration work that follows. Selling, general and administrative expenses are forecast to rise about 6% in the year to March 2027, against roughly 3% excluding Digital Holdings. Whether gross profit was built up by more than that difference will only become a figure with the results for the year to March 2027.