Brother Industries Declines to Raise Bid for Roland DG Amid Acquisition Challenge

Brother has announced it will not increase its tender offer price for Roland DG Corporation, signalling a step back from the highly contested buyout. The decision follows extensive negotiations and increasing complexities in discussions with Roland DG's management.

Brother Industries initially proposed to acquire all common shares of Roland DG at ¥5,200 per share. This offer came in response to a competing management buyout (MBO) tender by XYZ K.K., which initially offered ¥5,035 per share and later increased their bid to ¥5,370 per share.

Despite a formal Letter of Intent submitted in September 2023, Brother Industries faced significant hurdles. The company also says that Roland DG pursued the MBO without involving Brother in the bidding or due diligence processes. Additionally, Roland DG requested detailed and specific proposals from Brother, citing concerns over potential dis-synergies.

Brother Industries has expressed concerns throughout the process, including making allegations of misleading stakeholders. These actions, according to Brother Industries, made it difficult to establish the trust necessary for enhancing corporate value.

Given these circumstances, Brother Industries decided not to raise its tender offer price from ¥5,200 per share. The company stated that without a relationship of trust, achieving the maximum corporate value enhancement would be challenging.

Brother says it remains committed to its strategic vision of growth in the industrial field and transformation in the printing sector. The tender offer will proceed as originally planned if the conditions precedent are fulfilled or waived.