[News+1] Taiyo HD Goes Private: The 500 Billion Yen Landing Point Guided by KKR After Being Surrounded by Enemies

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Why did the world leader in solder resist decide to go private?

According to reports, the US investment fund KKR officially announced on March 31, 2026, that it would launch a tender offer (TOB) for the shares of Taiyo Holdings (hereinafter "Taiyo HD") at 4,750 yen per share ({Bloomberg report). The total acquisition value is approximately 500 billion yen, and the goal is to take the company private through the acquisition of all shares.

Taiyo HD is a "hidden giant" that boasts a global market share of approximately 60% in solder resist for printed wiring boards. With the importance of semiconductor materials increasing due to the expansion of generative AI and data center demand, why delist at this timing? There is a complex history surrounding governance here.

An unprecedented situation: Rejection of the president's reappointment

The origin of the matter was the ordinary general meeting of shareholders in June 2025. According to reports, the proposal for the reappointment of then-President Eiji Sato as a director was rejected with an approval rate of 46.09% ({Nikkei report). It is extremely rare for a president's reappointment to be rejected at a listed company in Japan.

Those who voted against it were the top shareholder DIC (holding ratio of approximately 20%), the Hong Kong activist fund Oasis Management, and Kowa, the asset management company of the founding family. If the major shareholders aligned, the rejection was unavoidable.

The issues raised by Oasis were wide-ranging, including dilution due to a third-party allotment to DIC in 2017, large-scale investments in the pharmaceutical business, and the handling of scandals at the Thai subsidiary. The structure of the top shareholder, the founding family, and an activist aligning to say "no" to the president can only be described as being "surrounded by enemies."

Going private scheme through TOB and share consolidation

According to reports, the special committee established under the new president, Hitoshi Saito, determined in February 2026 that KKR's acquisition proposal was appropriate ({Bloomberg report).

This scheme is a two-stage method combining a TOB by KJ005 Co., Ltd., a subsidiary of KKR, and subsequent share consolidation. Article 27-2 of the Financial Instruments and Exchange Act mandates the implementation of a TOB when share acquisitions outside the market exceed a certain percentage ({e-Gov Law Search). Since a TOB often does not result in the acquisition of all shares, Article 180 of the Companies Act regarding share consolidation is used as a means to squeeze out remaining shareholders ({e-Gov Law Search).

What is noteworthy is that the exit differs for each major shareholder. DIC and the founding family (Kowa) will not tender their shares in the TOB but will sell their holdings through share consolidation and treasury stock acquisition after the TOB is completed. On the other hand, Oasis has entered into an agreement to tender shares equivalent to approximately 15.62% of the issued shares directly into the TOB. Furthermore, the founding family plans to reinvest in the holding company under KKR after the company goes private, which shows their intention to continue their involvement in the business.

How to evaluate the TOB price of 4,750 yen

The TOB price of 4,750 yen per share is lower than the closing price of 4,984 yen on March 31. It is somewhat rare for a TOB of a listed stock to be lower than the market price. However, this is likely because the major shareholders have already signed agreements to support and tender their shares to the TOB, creating a structure where the success of the purchase is almost certain.

Reports state that this is a premium of approximately 117% over the 6-month average closing price. Since the recent stock price had risen while incorporating expectations of going private, it is possible to evaluate that a reasonable premium is attached if based on past stock price levels. However, from the perspective of minority shareholders, they are being forced to sell at a price lower than the current closing price, so the appropriateness of the price is a difficult issue. Shareholders who oppose the share consolidation retain the right under the Companies Act to file a petition with the court for a price determination.

Growth strategy under KKR and future outlook

Taiyo HD has set forth a long-term management vision, "Beyond Imagination 2030," and aims for growth centered on the electronics business. By going private and being released from the obligation to disclose quarterly financial results, the company will be able to proceed with large-scale investments in the semiconductor materials field and collaborations with other companies without worrying about short-term market evaluations.

However, Opasuke believes that this going-private move is largely a result of the inability to resolve conflicts between shareholders. The question remains whether governance issues could have been resolved through dialogue with shareholders while maintaining the listing. The start of the TOB is scheduled for early October 2026, and I would like to keep a close eye on the progress of the procedures.

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