The family office of the Nintendo Co. founder is backing plans by senior executives at Japan Systems Co. to take the software company private, countering a takeover offer from a Hong Kong-based investment firm, according to people with knowledge of the matter.
The Yamauchi No. 10 Family Office, which manages more than 100 billion yen ($972 million) in assets, plans to spend billions of yen to support the management buyout, which could be valued at as much as 15 billion yen if bank loans are included, the people said, declining to be identified because the matter is private.
Japan Systems’s management team, led by President Tomohiro Kawada, is trying to fend off a tender offer from private equity firm The Longreach Group Ltd. In December, U.S.-based DXC Technology Co., which owns the majority of Japan Systems stocks, signed an agreement to sell all of its shares to the Hong Kong-based company.
Executives at Japan Systems are considering paying 615 yen for each Japan Systems share, according to filings. The Longreach Group offer, which is valid until Feb. 15, was for 590 yen per share. The stock closed unchanged at 588 yen in Tokyo on Tuesday.
Kawada plans to set up a special purpose vehicle for the buyout and the Yamauchi No. 10 Family Office may invest about 3.5 billion yen in the SPV, the people said. Kawada may use bank loans to finance the buyout, they said.
Kawada declined to comment on the plans. Hirowaka Murakami, co-chief investment officer at the Yamauchi family office, wasn’t able to comment.
The Yamauchi No. 10 Family Office manages assets previously owned by former Nintendo Chief Executive Officer Hiroshi Yamauchi who died in 2013, the people said. Yamauchi was Nintendo’s second-largest shareholder and held about 10% of the stock before his death, according to data compiled by Bloomberg.