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December 7, 2007

Notification with Respect to Results of Tender Offer for Shares of Kyowa Hakko Kogyo Co.,Ltd.

Kirin Holdings Company, Limited (the "Company" or the "Tender Offeror") has concluded as of December 6, 2007 a tender offer (the "Tender Offer") for the shares of common stock of Kyowa Hakko Kogyo Co., Ltd (the "Target Company") (Code number:4151, the First Section of the Tokyo Stock Exchange) which commenced on October 31, 2007. In connection with the conclusion of the Tender Offer, we would like to provide notice of the following:

1. Description of the Tender Offer

(1) Name and Location of Head Office of Tender Offeror

Kirin Holdings Company, Limited
2-10-1 Shinkawa,Chuo-ku, Tokyo

(2) Name of Target Company

Kyowa Hakko Kogyo Co.,Ltd.

(3) Class of Shares Purchased

Common Stock

(4) Number of Share Certificates to be Purchased in the Tender Offer

Class of Shares
Number Scheduled
to be Purchased
Represented by Shares
Minimum Number
Scheduled to be
Purchased Represented
by Shares
Maximum Number
Scheduled to be Purchased
Represented by Shares
Share Certificate
111,578,000 shares
79,849,000 shares
111,578,000 shares
Certificate of Stock
Acquisition Rights
Bond Certificate with
Stock Acquisition Rights
Trust Beneficiary
Certificates for Share
Certificates
Depositary Receipt for Share
Certificates (       )
Total
111,578,000 shares
79,849,000 shares
111,578,000 shares

(5) Period of the Tender Offer

From Wednesday, October 31, 2007 through Thursday, December 6, 2007 (26 business days in Japan) (the "Tender Offer Period")

(6) Purchase Price of the Tender Offer

1,500 yen per share of common stock

2. Result of the Tender Offer

(1) Condition of Tendered Shares and other Securities

Class of Shares
Number Tendered
Represented by Shares
Number Purchased
Represented by Shares
Share Certificate
273,505,696 shares
111,578,000 shares
Certificate of Stock
Acquisition Rights
Bond Certificate with Stock
Acquisition Rights
Trust Beneficiary Certificates
for Share Certificates
Depositary Receipt for Share
Certificates (       )
Total
273,505,696 shares
111,578,000 shares

(2) Success of the Tender Offer

In the Tender Offer, a condition was imposed that if the total number of shares tendered in the Tender Offer was less than the minimum number of share certificates scheduled to be purchased represented by shares (79,849,000 shares), none of the tendered shares would be purchased by the Tender Offeror. Because the total number of shares tendered in the Tender Offer was more than the minimum number of share certificates to be purchased represented by shares, the condition was satisfied.

Because the total number of shares tendered in the Tender Offer exceeded the maximum number scheduled to be purchased represented by shares (111,578,000 shares) the Tender Offeror will make delivery and other settlements with respect to the purchase of shares pursuant to the pro rata method as defined in Article 27-13, Item 5 of the Financial Instruments and Exchange Law (Law No. 25 of 1948 as amended) (the "Law") and Article 32 of the Cabinet Ordinance regarding disclosure of tender offer for shares and other securities by non-issuers (MOF Ordinance No. 38 of 1990 as amended) (the "TOB Order").

(3) Ownership Percentage of Share Certificates after the Tender Offer

Category
Number of Voting Rights
Ownership Percentage
of Share Certificates
Number of Voting Rights Represented by Share
Certificates Owned by the Tender Offeror before
the Tender Offer
1
0.00%
Number of Voting Rights Represented by Share
Certificates Owned by the Tender Offeror after
the Tender Offer
111,579
28.49%
Number of Voting Rights Represented by Share
Certificates Owned by Specially Related Parties
before the Tender Offer
0
0%
Number of Voting Rights Represented by Share
Certificates Owned by Specially Related Parties
after the Tender Offer
0
0%
Total Number of Voting Rights of Shareholders
of the Target Company
391,528

(Note 1) The "Total Number of Voting Rights of Shareholders of the Target Company"represents the number of voting rights of all of the shareholders as of the fiscal year ended March 31, 2007 as described in the 84th Annual Securities Report submitted by the Target Company to the Kanto Local Finance Bureau on June 20, 2007. However, for the purpose of calculating "Ownership Percentage of Share Certificates", the "Total Number of Voting Rights of Shareholders of the Target Company" is calculated to be 391,669 units. This number includes (i) the number of voting rights (61 units) represented by the number of shares of the Target Company delivered upon exercise of the stock acquisition rights in relation to the stock option plan prior to the last day of the Tender Offer Period (61,000 shares), and (ii) the number of voting rights (80 units)represented by the number of shares of the Target Company held by Japan Synthetic Alcohol Co., Ltd. (80,000 shares).

(Note 2) "Ownership Percentage of Share Certificates" is rounded to the nearest hundredth of a percent.

(4) Calculation for Purchase Pursuant to the Pro Rata Method

Because the total number of shares tendered in this Tender Offer exceeded the maximum number scheduled to be purchased represented by shares (111,578,000 shares), as described in the "Notification with Respect to Commencement of Tender Offer for Shares of Kyowa Hakko Kogyo Co., Ltd." and the "Tender Offer Registration Statement", all or part of the excess portion will not be purchased and the Tender Offeror will make delivery and other settlements with respect to the purchase of shares pursuant to the pro rata method as defined in Article 27-13, Item 5 of the Law and Article 32 of the TOB Order.

Because the total number of shares to be purchased from all tendering shareholders (the "Tendering Shareholders") was calculated pursuant to the pro rata method, in which shares constituting less than one unit were rounded off, and as a result was less than the maximum number scheduled to be purchased represented by shares, the Tender Offeror purchased one unit from each Tendering Shareholder in descending order, beginning with shareholders that owned the most rounded-off shares, until the total number of shares to be purchased was equal to the maximum number scheduled to be purchased represented by shares. (If by purchasing units, the Tender Offeror would have exceeded the number of shares tendered in the Tender Offer, the Tender Offeror purchased shares until the number of shares to be purchased was equal to the number of shares tendered.)

However,because the result would have exceeded the maximum number scheduled to be purchased represented by shares if the Tender Offeror had purchased units from all Tendering Shareholders who hold equal numbers of shares that were rounded-up, the Tender Offeror selected by lottery who the Tender Offeror would purchase units from, to the extent that the total number of shares purchased was no less than the maximum number scheduled to be purchased represented by shares.

(5) Funds Required for Tender Offer, etc.

167,367,000,000 yen

(6) Method of Settlement

  • Name and Address of Head Offices of Securities Companies and Banks, etc. in Charge of Settlement

    Nikko Citigroup Limited
    1-5-1 Marunouchi, Chiyoda-Ku, Tokyo

    Nikko Cordial Securities Inc.
    3-3-1 Marunouchi,Chiyoda-Ku, Tokyo

  • Commencement Date of Settlement

    Thursday,December 13, 2007

  • Method of Settlement

    A notice of purchase will be mailed to the address or location of the Tendering Shareholder (or the standing proxy in the case of a non-resident shareholder) promptly after the end of the Tender Offer Period. Payment of the purchase price will be made in cash. Nikko Citigroup Limited (the "Tender Offer Agent") or Nikko Cordial Securities Inc. (the "Sub-Agent") will, in accordance with the shareholder's instructions, remit the purchase price for share certificates promptly after the commencement date of settlement to the account designated by the Tendering Shareholder (or the standing proxy in the case of a non-resident shareholder).

(7) Method to return Share Certificates

The Tender Offer Agent or the Sub-Agent will return all tendered share certificates which are required to be returned to the Tendering Shareholders promptly after the settlement date, Thursday, December 13, 2007, by the method described below. Please take this into consideration in the event of a sale, depositing your shares with a different broker, or other disposal of the shares to be returned conducted prior to the return of such shares.

  • In cases where share certificates were submitted to the Tender Offer Agent or the Sub-Agent upon application, the share certificates which were not purchased shall be delivered to the Tendering Shareholder or mailed to the Tendering Shareholder's address (in the case of a non-resident shareholder, the address of their standing proxy).

  • In cases where share certificates are kept in custody by the Tender Offer Agent or the Sub-Agent (or by the Japan Securities Depository Center through the Tender Offer Agent or the Sub-Agent) the share certificates which were not purchased will be returned to the same condition of custody as at the time of application.

3. Policies and Outlook After the Tender Offer

After the Tender Offer is completed, to promptly implement the integration of the pharmaceutical business, the Target Company and Kirin Pharma Company Ltd ("Kirin Pharma") will, subject to approval being obtained at their respective general meetings of shareholders, conduct a share exchange (the "Share Exchange") effective as of April 1, 2008. As a result, Kirin Pharma will become a wholly owned subsidiary of the Target Company and the Tender Offeror shall become the parent company holding, in conjunction with the shares acquired through the Tender Offer and related transactions, shares equivalent to 50.10% of the standard number of shares (Note 1) of the Target Company. In the Share Exchange, 8,862 shares (Note 2) of common stock of the Target Company will be allocated and delivered for each share of common stock of Kirin Pharma, for a total of 177,240,000 shares.

(Note 1) In this Notification, the standard number of shares (the "Standard Number of Shares") is the sum of (i)the total number of issued shares of common stock of the Target Company (including the number of treasury shares of common stock held by the Target Company) and (ii) any excess of the number of common stock underlying the stock acquisition rights issued by the Target Company, over the number of treasury shares of common stock held by the Target Company.

(Note 2) Treasury shares of Kirin Pharma are scheduled to be cancelled by the day before the Share Exchange becomes effective.

After the Share Exchange becomes effective, the Target Company as the surviving company (the "Surviving Company") and Kirin Pharma as the merging company will merge (the "Merger") with an effective date of October 1, 2008. As a result of the Merger, the integration of the pharmaceutical businesses of Kyowa Hakko and Kirin Pharma will be complete. Matters to be provided in the merger agreement with respect to the Merger (the "Merger Agreement"), other than the above, will be determined before the conclusion of the Merger Agreement. In accordance with the Merger, the trade name of the Surviving Company will change and, after approval from the general meeting of shareholders, the trade name of the Surviving Company after the Merger shall become "Kyowa Hakko Kirin Co., Ltd."

After the Tender Offer and the Share Exchange, the President and Representative Director of the Target Company shall remain in the same position, for the time being. In addition, it was agreed in the integration agreement (the "Integration Agreement") that the Target Company shall,subject to the Share Exchange becoming effective, make changes to its management structure pursuant to the Integration Agreement including (i) seeking approval of agenda with respect to electing two persons appointed by the Tender Offeror as Directors of the Target Company at the Extraordinary Meeting of Shareholders of Kyowa Hakko, and (ii) electing one of the Directors appointed by the Tender Offeror as Vice President and Representative Director of the Target Company. Furthermore, it is agreed that, subject to the Share Exchange becoming effective, (i) Kirin Pharma shall elect one person whom the Target Company appoints as a Director of Kirin Pharma, and (ii) the Tender Offeror shall seek approval with respect to the election of the President and Representative Director of the Target Company as a Director of the Tender Offeror at the ordinary general meeting of shareholders for the fiscal year ending December 31, 2007.

After the Tender Offer and the Share Exchange, the Target Company will become a consolidated subsidiary of the Tender Offeror which, as a pure holding company, will hold a majority of the shareholder voting rights of the Target Company. The Target Company will, while respecting the fundamental principles of the Kirin Group's operation, conduct an autonomous business activity based on independence and mobility, ensure the independence of its management as an ongoing public listed company, and continue to promote the maximization of profits for all of its shareholders and the sustained expansion of corporate value. Therefore, the shareholding ratio of the Tender Offeror in the Target Company (Note 2) shall be 50.10% in principle for a period of 10 years from the date of the execution of the Integration Agreement, and after the Integration, the Tender Offeror will cooperate in the strongest reasonable manner to maintain the listing of the shares of the Surviving Company established through the Merger. Furthermore, the Kirin Group agrees not to acquire any new shares/stock acquisition rights of the Target Company, or dispose (including sale or disposition as collateral) of shares/stock acquisition rights of the Target Company which the Kirin Group currently holds, for a period of 10 years from the date of the execution of the Integration Agreement, except as prescribed, without the consent of the Target Company.

(Note 3) In this Notification,the shareholding ratio of the Tender Offeror in the Target Company shall be the sum of (i) the number of shares of common stock of the Target Company which the Tender Offeror (including its subsidiaries and affiliates but excluding the Target Company and their subsidiaries and affiliates) holds and (ii) the number of new shares of common stock of the Target Company which will be issued upon exercise of stock acquisition rights held by the Tender Offeror, divided by the Standard Number of Shares of the Target Company.

4. Location at which a Copy of the Tender Offer Report is available to the Public

Head Office of Kirin Holdings Company, Limited
(2-10-1 Shinkawa, Chuo-ku, Tokyo)

Tokyo Stock Exchange Group, Inc.
(2-1 Kabutocho, Nihonbashi, Chuo-ku, Tokyo)


(Note 1) Except as otherwise provided in this Notification, a reference to a number of days or a date and time means such number of days or date and time in Japan.

(Note 2) "Business days" in this Notification means a number of days excluding those days provided in Article 1(1) of the Government Holiday Law.

(Note 3) Unless otherwise provided in this Notification, all procedures with respect to the Tender Offer shall be conducted in the Japanese language. If any part of the documents relating to the Tender Offer is prepared in English, and in the event that any inconsistency exists between the English and Japanese documents, the Japanese documents shall take priority over the English documents.

(Note 4) This Notification contains forward-looking statements as defined under Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. As a result of known or unknown risks, uncertainty or other factors, actual results could differ materially from any explicit or implicit forecasts, among others, presented as forward-looking statements. No assurance is given by the Tender Offeror or any affiliates of the Tender Offeror that any such explicit or implicit forecasts, among others, presented as forward-looking statements will be achieved and actual results could differ materially.The forward-looking statements contained in this Notification were made based on the information available to the Tender Offeror as of the date of this Notification and, except where bound by law or Tokyo Stock Exchange regulations, the Tender Offeror and any affiliates of the Tender Offeror accept no obligation to change or revise the statements to reflect future events or circumstances.

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© 2007 Kirin Holdings Company, Limited.

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