SoftBank’s LY, Bain Lift Kakaku Bid to $4.1 Billion

SoftBank’s LY Corp, backed by Bain Capital, raised its offer for Kakaku.com to $4.1 billion, moving to seal the Japanese price-comparison site after an earlier bid fell short. The new price works out to roughly ¥2,650 per share, up from the initial ¥2,450, according to people familiar with the matter.

LY Corp, the Yahoo Japan operator controlled by SoftBank and Naver, and Bain have been circling Kakaku for months. The earlier approach struggled to win over Kakaku’s board and a handful of large institutional holders who argued it undervalued the company’s restaurant-review and travel-booking growth. Kakaku’s advisory committee said the revised bid was “toward the upper end of the fair-value range” from its own analysis, a softer stance than the tepid language it used on the first offer.

The takeover structure mirrors LY’s playbook in other Japanese internet consolidations: a friendly deal with a premium big enough to get tenders, paired with Bain’s balance sheet to absorb the financing risk. For SoftBank, the deal is a rare concentrated bet on domestic consumer internet after years of Vision Fund bets that went sideways. Kakaku’s sites sit atop Japan’s local-services advertising market, a sector that has held up even as e-commerce margins have thinned. The travel-and-dining segment alone contributed more than half of Kakaku’s ¥66 billion in revenue in the last fiscal year, and its operating margins have stayed above 35% through several yen cycles.

Bain’s involvement means LY does not have to stretch its own leverage ratios to close the gap. The private-equity firm has been ramping its Japanese tech-services exposure, and a Kakaku buyout fits the same thesis it used on the 2022 take-private of Hitachi High-Tech: a dominant domestic platform with predictable cash flows and a low regulatory ceiling. Bain will likely take a board seat and a minority equity stake, with LY holding operational control.

For Kakaku’s minority holders, the math comes down to timing. The ¥2,650 offer is roughly a 22% premium to where the stock traded before the first bid leaked. Some institutional shareholders who held out for ¥3,000 are now signaling they will tender at ¥2,650, two people involved in the negotiation said. The risk of sticking for a third bid is that LY walks, leaving Kakaku’s shares to drift back to the low ¥2,000s where they traded before the process began. The tender period runs through mid-July, and LY has said it needs to secure at least 65% of shares to proceed with a compulsory squeeze-out.

SoftBank’s wider portfolio strategy also hangs on the outcome. LY is SoftBank’s main cash-generation vehicle outside the Vision Fund, and a controlled Kakaku would add a high-margin revenue stream that sits outside the volatility of Alibaba and Arm. That matters because SoftBank’s debt-to-equity ratio, while manageable, leaves little room for another bet-the-company deal after the Arm stake sales of 2024. A successful Kakaku close would give SoftBank a consolidated internet asset inside Japan that it can use as collateral for future loans, something its overseas holdings do not provide as cleanly.

The Kakaku board is expected to formally endorse the revised bid in a statement this week. Shareholders will vote on a special resolution by early August.