Press Releases 2019

(5) Number of Share Certificates, etc. to be purchased

Number of shares to be purchased Lower limit of shares to be purchased Upper limit of shares to be purchased
83,606,486 shares - Shares - Shares
[Notes]
  1. *1
    The Tender Offerors do not set the upper or lower limit of shares to be purchased and the Tender Offerors will purchase all the Tendered Share Certificates, etc.
  2. *2
    The upper limit of shares to be purchased has not set in the Tender Offer, so the number of shares to be purchased is 83,606,486 shares, the upper limit of the Target Company Common Shares that the Tender Offerors may acquire through the Tender Offer. Such upper limit is calculated as follows: (ⅰ) 240,961,642 shares, all the outstanding shares of the Target Company as of September 30, 2019, as stated in the Target Company's Quarterly Securities Report for the Third Quarter of the 20th Fiscal Year , which includes 8,780,253 shares of the original shares of the American Depositary Receipts (the number of shares that would have been converted into the Target Company Common Shares from the American Depositary Receipts); plus (ⅱ) 268,364,328 shares, the total number of the Target Company Common Shares to be issued upon exercise of all the Share Options (7,873,600 shares) and the Target Company Common Shares to be issued upon exercise of all share options with the Convertible Bonds (19,529,086 shares), less (ⅲ) 9,764,543 shares, the total number of the Target Company Common Shares owned by NAVER (174,992,000 shares) and the Target Company Common Shares to be issued upon exercise of share options with the Convertible Bonds held by NAVER, and the number of treasury shares owned by the Target Company as of September 30, 2019 as stated in the Target Company's Quarterly Securities Report for the Third Quarter of the 20th Fiscal Year (1,299 shares).
  3. *3
    Shares less than one unit are also eligible for the Tender Offer. If a right to demand purchase of shares less than one unit is exercised by a shareholder in accordance with the Companies Act, the Target Company may purchase the shares in the Target Company during the Tender Offer Period in accordance with the procedures under the laws and regulations.
  4. *4
    There is not plan to acquire the treasury stock held by the Target Company through the Tender Offer.
  5. *5
    The Tender Offerors has the plan in that SoftBank will purchase the number of the Target Company Shares equal to 50% of each type of the Tendered Share Certificates, etc. and NAVER will purchase the number of the Target Company Shares equal to 50% of the remaining thereof, provided, however, that if there is a fraction in the number of any type of the Tendered Share Certificates, etc. that each of the Tender Offerors will purchase, the number of such type of the Tendered Share Certificates, etc. that SoftBank will purchase will be rounded up, and the number of such type of the Tendered Share Certificates, etc. that NAVER Offerors will purchase will be rounded down.

(6) Changes in Ownership Ratio of Share Certificates, etc. as a Result of Purchases

Number of voting rights represented by Share Certificates, etc. held by the Tender Offerors before the Tender Offer 1,847,565 (Ownership ratio of Share Certificates,
etc. before the Tender Offer
70.07%)
Number of voting rights represented by Share Certificates, etc. held by special related parties before the Tender Offer 0 (Ownership ratio of Share Certificates,
etc. before the Tender Offer
0.00%)
Number of voting rights represented by Share Certificates, etc. held by the Tender Offerors after the Tender Offer 2,636,680 (Ownership ratio of Share Certificates,
etc. after the Tender Offer
100.00%)
Number of voting rights represented by Share Certificates, etc. held by special related parties after the Tender Offer 0 (Ownership ratio of Share Certificates,
etc. after the Tender Offer
0.00%)
Number of voting rights of all shareholders of the Target Company 2,408,550
[Notes]
  1. *1
    “Number of voting rights represented by Share Certificates, etc. held by special related parties before the Tender Offer” and “Ownership ratio of Share Certificates, etc. before the Tender Offer” are scheduled to be disclosed by the commencement of the Tender Offer upon the investigation of the Share Certificates, etc. held by each special related party, excluding the Target Company Shares owned by the Tender Offerors who fall under special related parties each other and the treasury stock held by the Target Company (the same shall apply hereinafter in *2. The Share Certificates, etc. held by each special related party are also eligible to the Tender Offer, so “Number of voting rights represented by Share Certificates, etc. held by special related parties after the Tender Offer” is set at 0.
  2. *2
    “Number of voting rights of all shareholders of the Target Company” represents the number of voting rights of all shareholders as stated in the stock ledger as of September 30, 2019 stated in the Target Company's Quarterly Securities Report for the third Quarter of the 20th Fiscal Year. However, since all shares less than one unit, the Share Options and the Convertible Bonds are eligible to the Tender Offer, the denominator for the calculation of the “Ownership ratio of Share Certificates, etc. before the Tender Offer” and “Ownership ratio of Share Certificates, etc. after the Tender Offer” was the number of voting rights (2,636,680 shares) pertaining to Total Number of Voting Shares of the Target Company (263,668,029 shares).
  3. *3
    “Ownership ratio of Share Certificates, etc. before the Tender Offer” and “Ownership ratio of Share Certificates, etc. after the Tender Offer” have been rounded off to the second decimal place.

(7) Purchase price JPY 372,010,600,290

[Notes]
  1. *1
    The purchase price is the amount calculated as follows: (ⅰ)the amount obtained multiplying 69,164,943 shares, the number of the Target Company Common Shares of the remainder after the number of shares to be purchased (83,606,486 shares) has been subtracted by (a) the number of the Target Company Common Shares to be issued upon exercise of the 22nd Series Share Options, the 23th Series Share Options and the 24th Series Share Options which are unable to be exercise because the exercise periods of those share options do not come during the Tender Offer Period (4,695,000 shares), and (b) the number of the Target Company Common Shares to be issued upon exercise share options with the Convertible Bonds, excluding the Target Company Common Shares to be issued upon exercise share options with the Convertible Bonds held by NAVER excluding the number of shares to be purchased (9,764,543 shares)*2, by the Tender Offer Price (JPY 5,380); plus (ⅱ) the total amount obtained multiplying the number of the unit of the 22nd Series Share Options (30,240 units), the 23th Series Share Options (240 units) and the 24th Series Share Options (16,470 units) by the purchase price per unit of each share option (JPY1), respectively.
  2. *2
    Since it is not assumed that the Convertible Bonds will be offered in the Tender Offer because the Tender Offer Price is substantially below the face value thereof (27.96% discount for the Convertible Bonds due 2023 and 28.45% discount for the Convertible Bonds due 2025), so the Convertible Bonds are scheduled to be redeemed at the amount more than the face value under the Early Redemption Provision after the Tender Offer, the total number of the Target Company Common Shares to be issued upon exercise share options with the Convertible Bonds is not considered in the calculation of the purchase price above.

(8) Other Terms and Conditions and Methods of Purchases

① Other Terms and Conditions and Methods of Purchases

We will announce the settlement method, the date of the notice with the commencement of the Tender Offer, and other terms and conditions and methods of purchases as soon as they are set. Nomura Securities Co., Ltd. will be retained as a tender offer agent.

② Others

The Tender Offerors are scheduled to conduct the U.S. Tender Offer in parallel with the Tender Offer. The terms and conditions of the tender offer to be conducted in the United States and other terms and conditions are scheduled to be disclosed on the SEC's website (www.sec.gov), etc. as soon as they are set.

3. Managing Policy following the Tender Offer and the Outlook Going Forward

Please refer to “(2) Background, Purpose and Decision-making Process of the Decision to Implement the Tender Offer, and the Management Policy after the Tender Offer” in “1. Purpose of Purchase” above for details of the managing policy following the Tender Offer.

4. Other Information

(1) Existence and details of agreements executed between the Tender Offerors and the Target Company or its officers

① Existence and details of agreements executed between the Tender Offerors and the Target Company or its officers

The Tender Offerors, ZHD and the Target Company have entered into the Definitive Business Integration Agreement as of today. Please refer to “(3) Important Agreements Concerning the Tender Offer” in “1. Purpose of Purchase” above for the summary thereof.

According to the Target Company Press Release, at the meeting of the board of directors held today, the board of directors of the Target Company resolved to express the opinion that the board of directors agreed to the Tender Offers in Japan and the U.S. including the Tender Offer and recommend that all of its shareholder tender the Target Company Common Shares to the Tender Offers in Japan and the U.S. including the Tender Offer. On the other hand, as for, the board of directors resolved to leave the decision of whether to tender the Share Options and the Convertible Bonds to the Tender Offers in Japan and the U.S. including the Tender Offer to each holder of the Share Options and the Convertible Bonds. For the details of the process to make the decision in the Target Company, please refer to “(g) Approval of all the directors of the Target Company without interests and the opinion of all the statutory auditors of the Target Company without interests that they have no objection” in “(ⅱ) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and to avoid conflicts of interest” in “② Process of Valuation” in “(4) Basis for Valuation of the Price of Purchase ” in “2. Outline of the Purchase”.

② Background, purpose and decision-making process to the decision to conduct the Tender Offer and the management policy after the Tender Offer

Please refer to “(2) Background, Purpose and Decision-making Process of the Decision to Implement the Tender Offer, and the Management Policy after the Tender Offer” in “1. Purpose of Purchase” above for the background, purpose, and decision-making process to the decision to conduct the Tender Offer and the management policy after the Tender Offer.

③ Measures to ensure the fairness of the Tender Offer, including measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest

Please refer to "(ⅱ) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and to avoid conflicts of interest ” in “② Process of Valuation” in “(4) Basis for Valuation of the Price of Purchase” in “2. Outline of the Purchase”.

(2) Other information judged necessary by an investor to determine whether or not to offer purchases.

The Tender Offer will be conducted as a part of transactions to realize the Business Integration. The Tender Offerors issue the Press Release concerning the Definitive Business Agreement and ZHD and the Target Company issue a press release entitled “Concerning the execution of the definitive agreement with respect to business integration”, respectively as of today. Please refer each press release for the details of the Business Integration.

This press release contains “forward-looking statements” as defined in Section 27A of the U.S. Securities Act of 1933 (as amended) and Section 21E of the U.S. Securities and Exchange Act of 1934. Known or unknown risks, uncertainties and other factors could cause actual results to differ substantially from the projections and other matters expressly or impliedly set forth herein as “forward-looking statements”. Neither the Tender Offerors nor any of their affiliated companies guarantee that such expressed or implied projections set forth herein as “forward-looking statements” will eventually prove to be correct. The “forward-looking statements” contained in this press release have been prepared based on information held by the Tender Offerors and the Target Company as of the date of this press release and, unless otherwise required under applicable laws and regulations, neither the Tender Offerors nor any of their affiliated companies assume any obligation to update or revise this press release to reflect any future events or circumstances.

Each financial adviser of the Tender Offerors, the Target Company and its Special Committee, and their tender offer agent (including these affiliates) may, within their ordinary course of business and to the extent permitted under Japanese financial instruments laws and other applicable laws and in accordance with the requirements of Rule 14e-5(b) of the U.S. Securities and Exchange Act of 1934, prior to the commencement of the Tender Offer or during the Tender Offer Period, purchase or conduct any action to purchase the shares of the Target Company for their own account or for their customers' accounts. If any formation concerning such purchase is disclosed in Japan, disclosure will also be made on the English website (or other disclosure method) of the financial advisors or the tender offer agent who made such purchase.

The Tender Offer as stated in this press release has not yet commenced. This press release is disclosed for the purposes only to provide information and does not constitute an offer or solicitation for purchase of any securities. At the commencement of this Tender Offer, the Tender Offerors (and/or their affiliates if applicable) will file a tender offer statement with SEC in accordance with Schedule TO, including tender to purchase, format of deed of transfer and other documents relating to the Tender Offer, and the Target Company will file a Statement of Opinion under the Schedule 14D9 regarding the Tender Offer with the SEC. The Tender Offerors will mail these documents to the shareholders of the Target Company. These documents contain important information regarding the Tender Offer, and investors and shareholders are advised to read these application documents carefully when obtaining these documents. These and other documents filed by the Tender Offerors and the Target Company may be available for free on the SEC's website at www.sec.gov. Tender to purchase and related materials may also be available for free by contacting the information agent for the Tender Offer when available.