REG - Mitsubishi Corp. - Share Repurchase
03/04/2025 12:15
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RNS Number : 5654D Mitsubishi Corporation 03 April 2025
Translation of report filed with the Tokyo Stock Exchange on April 3, 2025
Notification of Share Repurchase, Tender Offer for Own Shares and Purchase on
the Market,
and Cancellation of Treasury Stock
Mitsubishi Corporation ("MC") hereby announces that MC has resolved at the
Board of Directors' meeting held on April 3, 2025 to determine the matters
concerning share repurchase, and conduct a tender offer for its own shares
(the "Tender Offer") and purchase on the market as the specific measures for
share repurchase pursuant to Paragraph 1, Article 459 of the Companies Act
(Act No. 86 of 2005, as amended; the "Companies Act") and the provisions of
the Articles of Incorporation, and it has also resolved to cancel treasury
stocks pursuant to Article 178 of the Companies Act. The details are as
follows:
I. Matters concerning share repurchase and cancellation of
treasury stock
1． Purpose of share repurchase program:
MC has set a policy of the progressive dividend and flexible share repurchase
as the basis for shareholder return as stated in "Corporate Strategy 2027 -
Leveraging Our Integrated Strength for the Future" ("Corporate Strategy 2027")
released as of April 3, 2025. Under the above policy, today MC resolved the
share repurchase of 1 trillion yen in total in order to further improve the
capital efficiency. This amount includes shareholder return of 0.4 trillion
yen (Note 1) from the post-returns free cash flow generated through "Midterm
Corporate Strategy 2024 - Creating MC Shared Value" ("Midterm Corporate
Strategy 2024") released in May 2022 that covers the periods form FY 2022 to
FY2024.
As part of our ongoing efforts to strengthen corporate governance, while MC
had been discussing appropriate measures to respond to the selling of shares
by cross-shareholders, some shareholders indicated their intentions to sell
its shares. In response to this, MC decided that, out of 1 trillion yen in
total for share repurchase, the share repurchase of 230 billion yen is to be
carried out through the Tender Offer stated in the "Ⅱ. The tender offer for
own shares" as described below and the share repurchase of the remaining
amount (770 billion yen (Note 2)) is to be carried out through purchase on the
market at the Tokyo Stock Exchange Inc. (the "Tokyo Stock Exchange") which is
scheduled to be conducted after the end of the offer period in the Tender
Offer (the "Tender Offer Period").
Since MC's net debt-to-equity ratio is projected to remain below the upper
threshold of 0.6x even after this share repurchase, financial soundness can be
sufficiently maintained. Therefore, MC will continue to proactively discuss
disciplined investments aimed at realization of growth strategy while
utilizing cash flow to be generated in and after FY2025 and making effective
use of financial leverage where appropriate.
(Note 1) It is the forecast stated in the Financial Highlights for the Nine
Months Ended December 31, 2024 released as of February 6, 2025.
(Note 2) It is the remaining amount if all the number of share certificates,
etc. to be purchased in the Tender Offer are purchased. Of the number of
shares certificates, etc. to be purchased in the Tender Offer, if there is any
number of shares that were not purchased, MC will acquire equivalent amount of
such number of shares through the purchase on the market at the Tokyo Stock
Exchange.
2．Details of share repurchase program:
(1) Class of shares to be repurchased : Common stock
(2) Aggregate repurchase amount : Up to 1 trillion yen
* Total number of shares to be repurchased through the Tender Offer and
purchase on the market based on the closing price on April 2, 2025 represents
about 10% of the total number of outstanding shares (excluding treasury
stock).
(3) Total number of shares to be repurchased : Up to 689,000,000 shares
*Represents up to about 17% of the total number of outstanding shares
(excluding treasury stock)
(4) Planned period for repurchase : April 4, 2025 to March 31, 2026*
(5) Method of repurchases : Of the aggregate repurchase amount, 230 billion yen (maximum) will be used
to acquire shares through the Tender Offer. Of the aggregate repurchase
amount, remaining amount that are not used to acquire shares through the
Tender Offer will be used to acquire shares through the method of purchase on
the market (discretionary investment contract with a securities firm) at the
Tokyo Stock Exchange after the end of the Tender Offer Period.
* This may change in accordance with relevant laws and regulations.
3．Details of matters concerning cancellation of treasury stock:
(1) Class of shares to be cancelled : Common stock
(2) Number of shares to be cancelled : All shares repurchased in above 2
(3) Planned date of cancellation : April 30, 2026
(References)
Holding status of treasury stock as of December 31, 2024
Total number of shares issued (excluding treasury stock): 3,976,767,583 shares
Number of treasury stock: 45,623,570 shares
II. The tender offer for own shares
1. Purpose of tender offer:
MC had set forth a target of total payout ratio (Note 1) at 30% to 40%
(targeted at around 40% in and after FY2023) in "Midterm Corporate Strategy
2024" released in May 2022. MC's policy is to implement flexible share
repurchase under financial discipline, while maintaining the basic policy of
progressive dividend that increases dividends in accordance with sustainable
profit growth, striking a balance between financial soundness, stable dividend
growth and market expectation for shareholders return.
(Note 1) It is the proportion of sum of total dividends and aggregate
repurchase amount to MC's profit attributable to owners of the Parent.
MC's basic policy with respect to the dividends is to pay dividend of surplus
twice a year: interim dividend and year-end dividend. The year-end dividend is
resolved at the shareholders' meeting and interim dividend is resolved at the
Board of Directors' meeting. Based on the above policy, with respect to FY2024
dividend, MC paid 50 yen per share for the interim dividend and plans to pay
50 yen per share for the year-end dividend.
In addition, MC stipulates in the Articles of Incorporation that it may pay
dividend of surplus and conduct share repurchase by resolutions at the Board
of Directors' meeting pursuant to Paragraph 1, Article 459 of the Companies
Act with an aim to flexibly return profits to shareholders. Furthermore, MC
repurchased its own shares as described in the table below through the method
of purchase on the market at the Tokyo Stock Exchange Inc. over the past five
years until today.
Date of resolution Cumulative period of repurchase Cumulative number of shares repurchased (Note 2) Cumulative total repurchase amount
The Board of Directors' meeting held on May 10, 2022 May 11, 2022 - 16,578,000 shares 69,999,918,000 yen
（49,734,000 shares）
September 1, 2022
The Board of Directors' meeting held on November 8, 2022 November 9, 2022 - 15,843,000 shares 69,999,831,800 yen
（47,529,000 shares）
February 15, 2023
The Board of Directors' meeting held on February 3, 2023 February 16, 2023 - 20,808,400 shares 99,999,916,400 yen
（62,425,200 shares）
April 28, 2023
The Board of Directors' meeting held on May 9, 2023 May 10, 2023 - 44,487,900 shares 299,999,792,900 yen
（133,463,700 shares）
December 20, 2023
The Board of Directors' meeting held on February 6, 2024 February 7, 2024 - 156,627,000 shares 499,999,765,400 yen
September 17, 2024
(Note 2) One January 1, 2024, MC conducted a three-for-one stock split of its
common shares. Figures in parentheses in the above table reflect the effects
of such share splits.
Furthermore, MC has set a policy of the progressive dividend and flexible
share repurchase as the basis for shareholder return in "Corporate Strategy
2027" released as of April 3, 2025. Please refer to "Corporate Strategy 2027"
released as of April 3, 2025 for details.
In the course of the review process leading to the formulation of
above-mentioned "Corporate Strategy 2027", Tokio Marine & Nichido Fire
Insurance Co., Ltd. ("Tokio Marine & Nichido") , which is a MC's
shareholder, informed MC in the middle of June, 2024 of its intention to
gradually sell its common stock owned by Tokio Marine & Nichido to reduce
the listed cross-shareholdings.
In response to this, MC had been considering various options to respond to the
Tokio Marine & Nichido's intension to sell its shares. In early January,
MC started discussions to acquire all or part of its common stock (Note 3)
owned by Tokio Marine & Nichido. This was because MC believed that if it
acquired its common stock to be sold by Tokio Marine & Nichido as its own
shares, it could repurchase its own shares on a considerable scale in a
relatively short period of time without impairing the liquidity of its common
stock and contribute to the improvement of capital efficiency such as ROE:
Return on Equity of MC, which then will lead to return of profit to
shareholders.
(Note 3) Tokio Marine & Nichido held 85,851,615 shares of MC's common
stock (ownership ratio: 2.16%) as of the March 31, 2025. "Ownership ratio"
means the percentage (rounded off to two decimal places) of shares to the
number of shares (3,976,767,583 shares) obtained by deducting the number of
treasury stock (45,623,570 shares) owned by MC as of December 31, 2024 from
the total number of shares issued (4,022,391,153 shares) as of the same day
stated in the Financial Highlights for the Nine Months Ended December 31, 2024
(Based on IFRS) (Consolidated) (the "Financial Highlights") released by MC on
February 12, 2025. The same applies below.
First, MC has had a series of discussions on the specific method to acquire
MC's common stock from viewpoint of its capital policy taking into
consideration the equality between shareholders, transparency of transactions
and transaction status in the market. As a result, MC came to a conclusion in
late January 2025 that it would be appropriate to acquire its common stock
through a method of tender offer due to the following reasons. In case of a
tender offer, MC can also provide its shareholders other than Tokio Marine
& Nichido with an opportunity to decide whether they agreed to share
repurchase based on the trend of market price after giving them a certain
period of time to review. Transparency of transaction can be secured by
purchasing shares in accordance with the procedure of a tender offer under
laws and regulations, etc. It is the off-market trading which is less likely
to impact the liquidity in the market of its common stock. Furthermore, in
case of share repurchase through the purchase on the market and off-floor
trading, although the equality between shareholders can be secured, the
purchase price needs to be set at the market price due to applicable rules.
This will make it impossible to purchase shares at a price obtained by
applying a certain discount to the market price, which is not preferred option
over a tender offer for MC in light of economic rationality.
Furthermore, with respect to decide the purchase price per share through the
Tender Offer (the "Tender Offer Price"), MC came to a conclusion in late
January 2025 that it is preferable to purchase share at a price obtained by
applying a certain discount to the market price of MC's common stock with an
aim to prevent outflow of MC's assets outside of company as much as possible.
This is due to the following reasons. MC's common stock are listed on the
stock exchange market and, in many cases, share repurchases conducted by
listed companies are performed through the purchase on the market on a stock
exchange because they can be flexibly purchased in accordance with stock price
level formed based on the market supply and demand balance. After considering
these factors, while placing an importance on the clarity and objectivity of
standard, MC came to believe that market price of MC's common stock should
serve as the basis. Furthermore, MC needs to respect interests of shareholders
that will continue to own MC's common stock without tendering shares in the
Tender Offer.
Therefore, MC inquired with Tokio Marine & Nichido on February 14, 2025,
about tendering its shares in the Tender Offer if MC conducts the Tender Offer
at a price obtained by applying a certain discount to the market price of MC's
common stock in the Prime Market of the Tokyo Stock Exchange. MC received
response from Tokio Marine & Nichido on February 21, 2025, that it has an
intention to tender all or part of its shares in the Tender Offer based on the
price MC proposed.
Subsequently, after discussing the level of specific discount ratio, MC came
to a conclusion that it is appropriate to set the discount ratio at 10% after
taking into consideration the volatility of MC's common stock and the
following matters. Out of all cases of tender offers for own shares announced
from January 1, 2021 until February 28, 2025 with the year 2021 set as a
starting point where discussions on the reduction of cross-shareholdings
accelerated in Japan, there were 79 cases (the "Reference Case") where tender
offers were conducted after certain shareholders agreed to tender its shares
in the tender offers at a discounted price similar to the Tender Offer. Out of
the 79 cases, in 68 cases, which was the largest number, approximately 10 %
(9% to 11%) discount ratio was applied to stock price which serves as the
basis.
In addition, against the backdrop of accelerating corporate governance
initiatives in full gear in recent years, MC came to believe that it is
preferable to acquire MC's common stock as much as possible from
cross-shareholders other than Tokio Marine & Nichido as well in order to
respond appropriately to the moves by the cross-shareholders to sell its
common stock. Therefore, on March 3, 2025, MC inquired with Mitsubishi
Logistics Corporation (Mitsubishi Logistics), a MC's shareholder, which had an
intention to sell its common stock, about tendering its shares in the Tender
Offer for MC's common stock (Note 4) owned by Mitsubishi Logistics.
(Note 4) As of March 31, 2025, Mitsubishi Logistics owned 14,116,143 shares of
MC's common stock and the ownership ratio was 0.35%
In parallel to the discussions and deliberations above, MC also discussed the
market price of its common stock that serves as the basis of discount used for
calculation of the Tender Offer Price. As a result, in order to decide the
market price of its common stock that serves as the basis of discount, MC came
to a conclusion that it is appropriate to use a price whichever is the lowest
between the followings as the benchmark: (i) the closing price of its common
stock on April 2, 2025, the business day immediately preceding April 3, 2025,
which is the planned date to hold the Board of Directors' meeting to resolve
the Tender Offer, (ii) the simple average value of the closing price of its
common stock for the past one month until the same day, (iii) the simple
average value of the closing price of its common stock for the past three
months until the same day and (iv) the simple average value of the closing
price of its common stock for the past six months until the same day in the
Prime Market of the Tokyo Stock Exchange. This is due to the following
reasons. It is considered reasonable to adopt an equalized value which is an
average stock price for a certain period in order to secure the objectivity
and reasonability as the basis of calculation excluding special factors such
as impacts of temporal stock price fluctuations. Also, it is considered that
the Tender Offer Price needs to be set at a level obtained by applying a
certain discount even when compared with the latest market price in order to
reduce the possibility that the market price may change during the Tender
Offer Period causing the market price to fall below the Tender Offer Price.
Based on the above discussions, MC inquired with Tokio Marine & Nichido on
March 10, 2025 about setting the Tender Offer Price at a price obtained by
applying a 10% discount rate to whichever is the lowest between the
followings: (i) the closing price of its common stock on April 2, 2025, the
business day immediately preceding April 3, 2025, which is the planned date of
resolution at the Board of Directors' meeting on the implementation of the
Tender Offer, (ii) the simple average value of the closing price of its common
stock for the past one month until the same day, (iii) the simple average
value of the closing price of its common stock for the past three months until
the same day and (iv) the simple average value of the closing price of its
common stock for the past six months until the same day. On the same day of
inquiry, Tokio Marine & Nichido made an initial response to agree to the
determination method of the Tender Offer Price.
Furthermore, MC received a response from Mitsubishi Logistics as well on March
10, 2025, that it had an intention to tender its shares in the Tender Offer
for part of the common stock owned by Mitsubishi Logistics. When MC inquired
with Mitsubishi Logistics on March 12, 2025 about its intention to adopt the
above-mentioned determination method of the Tender Offer Price, Mitsubishi
Logistics made an initial response on the same day to agree to the
determination method of the Tender Offer Price.
Subsequently, MC received responses respectively from Tokio Marine &
Nichido on March 17, 2025 for 85,851,615 shares of its common stock owned by
Tokio Marine & Nichido (ownership ratio: 2.16%) and from Mitsubishi
Logistics on March 12, 2025 for 7,000,000 shares of its common stock owned by
Mitsubishi Logistics (ownership ratio: 0.18%) out of 14,116,143 shares of its
common stock owned by Mitsubishi Logistics (ownership ratio: 0.35%) about
their intentions to tender its shares in the Tender Offer.
MC received official responses from Tokio Marine & Nichido on March 25,
2025 for 85,851,615 shares which are all of its common stocks owned by Tokio
Marine & Nichido (ownership ratio: 2.16%) and from Mitsubishi Logistics on
March 28, 2025 for 7,000,000 shares (ownership ratio: 0.18%) out of 14,116,143
shares of its common stock owned by Mitsubishi Logistics (ownership ratio:
0.35%) about their intentions to tender its shares in the Tender Offer if MC
implements the Tender Offer under the conditions as inquired above.
Note that the maximum number of share certificates, etc. to be purchased
through the Tender Offer was assumed to be approximately 230 billion yen in
total acquisition amount in preparing for the possibility of tendering from
shareholders other than Tokio Marine & Nichido or Mitsubishi Logistics. MC
believed the number of shares equivalent to the number obtained by dividing
the total acquisition amount by the Tender Offer Price would be appropriate.
If the total number of shares, etc. tendered in the Tender Offer (the
"Tendered Share Certificates, Etc") exceeds the number of share certificates,
etc. to be purchased, they shall be purchased by proportional distribution. In
that case, MC will acquire part of Shares Offered for Sale while it cannot
purchase remaining Shares Offered for Sale. On such a portion of shares that
were not purchased out of Shares Offered for Sale, MC confirmed with Tokio
Marine & Nichido about its intention to dispose of them through the market
sale as appropriate. In addition, Mitsubishi Logistics explained to MC that
currently policy on how to dispose of such remaining common stocks of MC is
yet to be decided.
Based on the above considerations and discussions, MC resolved at the Board of
the Directors' meeting held on April 3, 2025 as follows: (i) MC will conduct
share repurchase 'in accordance with MC's Articles of Incorporation pursuant
to Article 459, Paragraph 1 of the Companies Act, (ii) MC will conduct the
Tender Offer as a part of the share repurchase program, (iii) the Tender Offer
Price shall be 2,291 yen (rounded off to the nearest whole number; hereinafter
the same in the calculation of the Tender Offer Price), which is the price
obtained by applying a 10% discount to 2,546 yen, the lowest price between the
followings: (a) the closing price of its common stock on April 2, 2025 which
is the business day immediately preceding the date of resolution at the Board
of Directors' meeting on the implementation of the Tender Offer (2,615.0 yen),
(b) the simple average value of the closing price of its common stock for the
past one month until the same day (2,655 yen) (rounded off to the nearest
whole number; hereinafter the same in the calculation of the simple average
value of closing price of its common stock,) (c) the simple average value of
the closing price of its common stock for the past three months until the same
day (2,546 yen), (d) the simple average value of the closing price of its
common stock for the past six months until the same day (2,627 yen) and (iv)
the maximum number of share certificates, etc. to be purchased through the
Tender Offer shall be 100,390,000 shares (rounded off to the nearest 10,000
shares; hereinafter the same in the calculation of the number of share
certificates, etc. to be purchased through the Tender Offer Price) (ownership
ratio: 2.52%.) which is the number of shares equivalent to the number obtained
by dividing the total acquisition cost of approximately 230 billion yen by the
Tender Offer Price (2,291 yen.)
MC can finance the entire funds required for the Tender Offer with the
borrowings from MUFG Bank, Ltd. (MUFG Bank). However, in view of liquidity on
hand (cash and cash equivalents: hereinafter the same for the liquidity on
hand) as of the business day immediately preceding to the commencement date of
settlement in the Tender Offer as well as outlook of liquidity on hand beyond
the same day and other factors, MC may allocate its own funds to the funds
required for the Tender Offer instead without implementing all or part of the
above borrowings. Even in the case of implementing such borrowings to allocate
the fund obtained by implementing such borrowings to the funds required for
the Tender Offer (230,012 million yen), its liquidity on hand on the
consolidated basis as of December 31, 2024 was 1,352,759 million yen.
Therefore, MC believes that it can repay such borrowings without impacting its
financial soundness.
In addition to the above, MC has set a policy of the progressive dividend and
flexible share repurchase as the basis for shareholder returns as stated in
"Corporate Strategy 2027" released as of April 3, 2025. Under the above
policy, in order to further improve capital efficiency, MC resolved the share
repurchase (so called resolution on a quota for share repurchase) subject to
the following conditions: (i) the aggregate repurchase amount shall be 1
trillion yen at maximum, (ii) the total number of shares to be repurchased
shall be up to 689,000,000 shares and (iii) the planned period for repurchase
shall be from April 4, 2025 until March 31, 2026. To purchase MC's common
stocks on the market pursuant to the discretionary investment contract with a
securities firm and the number of its common stock to be acquired will be
equivalent to 770 billion yen (Note 5) obtained by deducting 230 billion yen
(Note 5), which is the aggregate repurchase amount in the Tender Offer, from 1
trillion yen resolved as a quota for share repurchase at the above-mentioned
Board of the Directors' meeting.
(Note 5) It is the amount if all the number of share certificates, etc. to be
purchased through the Tender Offer are purchased.
Furthermore, MC has resolved to cancel treasury stocks that are acquired
through the Tender Offer.
2. Details of the Board of Directors' resolution regarding share
repurchases
(1) Contents of resolution
Class of shares to be repurchased Total purchase price for share repurchases Total number of shares to be repurchased
Common stocks Up to 1,000,000,000,000 yen Up to 689,000,000 shares
(Note 1) The total purchase price for share repurchases is the maximum amount
of aggregate repurchase amount resolved at the Board of Directors' meeting
held on April 3, 2025.
(Note 2) The percentage of total shares issued (4,022,391,153 shares) is
17.13% (rounded off to two decimal places)
(Note 3) The total number of shares to be repurchased is the maximum total
number of shares to be repurchased resolved at the Board of Directors' meeting
held on April 3, 2025.
(Note 4) The planned period for repurchase is from April 4, 2025 to March 31,
2026.*
* This may change in accordance with relevant laws and regulations.
(Note 5) Of the total number of shares to be repurchased, shares not
repurchased through the Tender Offer will be repurchased after the end of the
Tender Offer Period by way of a market purchase on the Tokyo Stock Exchange
(discretionary investment contract with a securities firm).
(2) Listed shares, etc. pertaining to treasury stock already repurchased based
on the said resolution
Not applicable
3. Outline of the Tender Offer, etc.
(1) Schedule, etc.
(i) Date of Board of Directors' resolution Thursday, April 3, 2025
(ii) Date of public notice of the commencement of Tender Offer Friday, April 4, 2025
Electronic public notice will be made and a notice to that effect will be
published in the Nikkei
Electric public notice address: https://disclosure2.edinet-fsa.go.jp/
(iii) Filing date of the Tender Offer Registration Statement Friday, April 4, 2025
(iv) Tender offer period From Friday, April 4, 2025 to Friday, May 2, 2025 (20 business days)
(2) Tender Offer Price
2,291 yen per share of common stock
(3) Basis of valuation of price for Tender Offer
(A) Basis of valuation
With respect to the Tender Offer Price, MC came to a conclusion in late
January 2025 that it is preferable to purchase share at a price obtained by
applying a certain discount to the market price of MC's common stock with an
aim to prevent outflow of MC's assets outside of company as much as possible.
This is due to the following reasons. MC's common stock are listed on the
stock exchange market and, in many cases, share repurchases conducted by
listed companies are performed through the purchase on the market on a stock
exchange because they can be flexibly purchased in accordance with stock price
level formed based on the market supply and demand balance. After considering
these factors, while placing an importance on the clarity and objectivity of
standard, MC came to believe that market price of MC's common stock should
serve as the basis. Furthermore, MC needs to respect interests of shareholders
that will continue to own MC's common stocks without tendering shares in the
Tender Offer.
Subsequently, after discussing the level of specific discount ratio, MC came
to a conclusion that it is appropriate to set the discount ratio at 10% after
taking into consideration the volatility of MC's common stock and the
following matters. Out of the 79 cases of the Reference Case, in 68 cases,
which was the largest number, approximately 10 % (9% to 11%) discount ratio
was applied to stock price which serves as the basis.
MC also discussed the market price of its common stock that serves as the
basis of discount used for calculation of the Tender Offer Price. As a result,
in order to decide the market price of its common stock that serves as the
basis of the discount, MC came to a conclusion that it is appropriate to use a
price whichever is the lowest between the followings as the benchmark: (i) the
closing price of its common stock on April 2, 2025, the business day
immediately preceding April 3, 2025, which is the planned date to hold the
Board of Directors' meeting to resolve the Tender Offer, (ii) the simple
average value of the closing price of its common stock for the past one month
until the same day, (iii) the simple average value of the closing price of its
common stock for the past three months until the same day and (iv) the simple
average value of the closing price of its common stock for the past six months
until the same day in the Prime Market of the Tokyo Stock Exchange. This is
due to the following reasons. It is considered reasonable to adopt an
equalized value which is the average stock price for a certain period in order
to secure objectivity and reasonability as the basis of calculation excluding
special factors such as impacts of temporal stock price fluctuations. Also, it
is considered that the Tender Offer Price needs to be set at a level obtained
by applying a certain discount even when compared with the latest market price
in order to reduce the possibility that the market price may change during the
Tender Offer Period causing the market price to fall below the Tender Offer
Price.
Based on the above discussions, MC inquired with Tokio Marine & Nichido on
March 10, 2025 about setting the Tender Offer Price at a price obtained by
applying a 10% discount rate to whichever is the lowest between the
followings: (i) the closing price of its common stock on April 2, 2025, the
business day immediately preceding April 3, 2025, which is the planned date of
resolution at the Board of Directors' meeting on the implementation of the
Tender Offer, (ii) the simple average value of the closing price of its common
stock for the past one month until the same day, (iii) the simple average
value of the closing price of its common stock for the past three months until
the same day and (iv) the simple average value of the closing price of its
common stock for the past six months until the same day. On the same day of
inquiry, Tokio Marine & Nichido made an initial response to agree to the
determination method of the Tender Offer Price.
Furthermore, MC received a response from Mitsubishi Logistics as well on March
10, 2025, that it had an intention to tender its shares in the Tender Offer
for part of common stock owned by Mitsubishi Logistics. When MC inquired with
Mitsubishi Logistics on March 12, 2025, about its intention to adopt the
above-mentioned determination method of the Tender Offer Price, Mitsubishi
Logistics made an initial response on the same day to agree to the
determination method of the Tender Offer Price.
Subsequently, MC received responses respectively from Tokio Marine &
Nichido on March 17, 2025 for 85,851,615 shares of its common stock owned by
Tokio Marine & Nichido (ownership ratio: 2.16%) and from Mitsubishi
Logistics on March 21, 2025 for 7,000,000 shares (ownership ratio: 0.18%) out
of 14,116,143 shares of its common stock owned by Mitsubishi Logistics
(ownership ratio: 0.35%) about their intentions to tender its shares in the
Tender Offer.
MC received official responses from Tokio Marine & Nichido on March 25,
2025, for 85,851,615 shares which are all of its common stocks owned by Tokio
Marine & Nichido (ownership ratio: 2.16%) and from Mitsubishi Logistics on
March 28, 2025 for 7,000,000 shares (ownership ratio: 0.18%) out of 14,116,143
shares of its common stock owned by Mitsubishi Logistics (ownership ratio:
0.35%) about their intentions to tender its shares in the Tender Offer if MC
implements the Tender Offer under the conditions as inquired above.
Based on the above considerations and discussions, MC resolved at the meeting
of Board of Directors held on April 3, 2025 to repurchase its shares in
accordance with MC's Articles of Incorporation pursuant to Article 459,
Paragraph 1 of the Companies Act, to conduct the Tender Offer as part of such
repurchase, to set the Tender Offer Price at 2,291 yen, which is obtained by
applying 10% discount to 2,546 yen, the lowest price between the followings:
(i) the closing price of its common stock on April 2, 2025, the business day
immediately preceding April 3, 2025, which is the date of the resolution at
the Board of Directors' meeting on the implementation of the Tender Offer
(2,615.0 yen), (ii) the simple average value of the closing price of its
common stock for the past one month until the same day (2,655 yen), (iii) the
simple average value of the closing price of its common stock for the past
three months until the same day (2,546 yen) and (iv) the simple average value
of the closing price of its common stock for the past six months until the
same day (2,627 yen). MC also resolved that the maximum number of shares to be
purchased through the Tender Offer shall be 100,390,000 shares (ownership
ratio: 2.52%), which is the number of shares equivalent to the number obtained
by dividing the total acquisition cost of approximately 230 billion yen by the
Tender Offer Price (2,291 yen.)
Note that the Tender Offer Price of 2,291 yen is a discount of 12.39% (rounded
off to two decimal places; hereinafter the same in the calculation of discount
ratio) on 2,615.0 yen, the closing price of MC's common stock on the Tokyo
Stock Exchange Prime Market on April 2, 2025, which is the business day
immediately preceding the date of the meeting of Board of Directors on the
implementation of the Tender Offer, a discount of 13.71% on 2,655 yen, which
was the simple average value of the closing price of MC's common stock for the
past one month until the same day, a discount of 10.02% on 2,546 yen, which
was the simple average value of the closing price of its common stock for the
past three months until the same day and a discount of 12.79% on 2,627 yen,
which was the simple average value of the closing price of its common stock
for the past six months until the same day.
(B) Background of valuation
Based on the considerations described in "(A) Basis of valuation" above, MC
inquired with Tokio Marine & Nichido on March 10, 2025 about setting the
Tender Offer Price at a price obtained by applying a 10% discount rate to
whichever is the lowest between the followings: (i) the closing price of its
common stock on April 2, 2025 , the business day immediately preceding April
3, 2025, which is the planned date of resolution at the Board of Directors'
meeting on the implementation of the Tender Offer, (ii) the simple average
value of the closing price of its common stock for the past one month until
the same day, (iii) the simple average value of the closing price of its
common stock for the past three months until the same day, (iv) the simple
average value of the closing price of its common stock for the past six months
until the same day. On March 10, 2025, Tokio Marine & Nichido made an
initial response to agree to the determination method of the Tender Offer
Price.
Furthermore, MC received a response from Mitsubishi Logistics as well on March
10, 2025, stating that it had an intention to tender its shares in the Tender
Offer for part of the common stock owned by Mitsubishi Logistics. When MC
inquired with Mitsubishi Logistics on March 12, 2025, about its intention to
adopt the above-mentioned determination method of the Tender Offer Price,
Mitsubishi Logistics made an initial response on the same day to agree to the
determination method of the Tender Offer Price.
Subsequently, MC received responses respectively from Tokio Marine &
Nichido on March 17, 2025 for 85,851,615 shares of its common stock owned by
Tokio Marine & Nichido (ownership ratio: 2.16%) and from Mitsubishi
Logistics on March 21, 2025 for 7,000,000 shares (ownership ratio: 0.18%) out
of 14,116,143 shares of its common stock owned by Mitsubishi Logistics
(ownership ratio: 0.35%) about their intentions to tender its shares in the
Tender Offer.
MC received official responses from Tokio Marine & Nichido on March 25,
2025, for 85,851,615 shares which are all of its common stocks owned by Tokio
Marine & Nichido (ownership ratio: 2.16%) and from Mitsubishi Logistics on
March 28, 2025 for 7,000,000 shares (ownership ratio: 0.18%) out of 14,116,143
shares of its common stock owned by Mitsubishi Logistics (ownership ratio:
0.35%) about their intentions to tender its shares in the Tender Offer if MC
implements the Tender Offer under the conditions as inquired above.
Based on the above considerations and discussions, MC resolved at the meeting
of Board of Directors held on April 3, 2025 to repurchase its shares in
accordance with MC's Articles of Incorporation pursuant to Article 459,
Paragraph 1 of the Companies Act, to conduct the Tender Offer as part of such
repurchase program, to set the Tender Offer Price at 2,291 yen, which is
obtained by applying 10% discount to 2,546 yen, the lowest price between the
followings: (i) the closing price of its common stock on April 2, 2025 which
is the business day immediately preceding the date of resolution at the Board
of Directors' meeting on the implementation of the Tender Offer (2,615.0 yen),
(ii) the simple average value of the closing price of its common stock for the
past one month until the same day (2,655 yen), (iii) the simple average value
of the closing price of its common stock for the past three months until the
same day (2,546 yen), (iv) the simple average value of the closing price of
its common stock for the past six months until the same day (2,627 yen). MC
also resolved that the maximum number of shares to be purchased through the
Tender Offer shall be 100,390,000 shares (ownership ratio: 2.52%), which is
the number of shares equivalent to the number obtained by dividing the total
acquisition cost of approximately 230 billion yen by the Tender Offer Price
2,291 yen.).
(4) Number of share certificates, etc. to be purchased
Class of shares to be repurchased Number of shares to be purchased Number of excess shares to be purchased Total number of shares to be purchased
Common stocks 100,390,000 shares － 100,390,000 shares
(Note 1) If the total number of Tendered Share Certificates, Etc. does not
exceed the number of shares to be purchased (100,390,000 shares), MC will
purchase all of the Tendered Share Certificates, Etc. If the total number of
Tendered Share Certificates, Etc. exceeds the number of shares to be purchased
(100,390,000shares), MC will not purchase all or part of such excess shares
and conduct transfer of share certificates and other settlement procedures in
relation to the purchase of shares by using the method of proportional
distribution as provided in Article 27-13, Paragraph 5 of the Financial
Instruments and Exchange Act (Act No.25 of 1948, as amended; the "Act") as
applied mutatis mutandis pursuant to Article 27-22-2, Paragraph 2 of the Act
and Article 21 of the Cabinet Office Ordinance Concerning the Disclosure of a
Tender Offer for Listed Shares by the Issuer (Ministry of Finance Ordinance
No.95 of 1994, as amended).
(Note 2) Shares less than one unit are also subject to 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, MC may purchase its own
shares during the purchase period in accordance with procedures under laws and
regulations.
(5) Funds required for purchase, etc.
230,012,490,000 yen
(Note) The amount of funds required for purchase, etc. is the total estimated
amount of the purchase price (229,993,490,000 yen) in the event that the
Tender Offeror purchases all the number of share certificates, etc. to be
purchased (100,390,000 shares), the purchase commission, and other expenses
such as public notice regarding the Tender Offer and printing costs for the
Tender Offer Explanatory Statement and other necessary documents.
(6) Method of settlement
(A) Name and address of the head office of financial instruments
business operator or bank, etc., in charge of settlement of purchase
Nomura Securities Co., Ltd. 1-13-1, Nihonbashi, Chuo-ku, Tokyo
(B) Commencement date of settlement
Wednesday, May 28, 2025
(C) Method of settlement
A notice regarding the purchase under the Tender Offer will be mailed to the
address of the shareholders who have tendered their shares in response to the
Tender Offer (the "Tendering Shareholders, etc.") or to the address of the
standing proxies for shareholders, etc. (including corporate shareholders,
etc.) residing outside Japan who do not have an account with the Tender Offer
Agent with which they can trade ("Non-Resident Shareholders, etc.") without
delay after the expiration of the Tender Offer Period.
Purchases will be made in cash. Tendering Shareholders, etc. may receive the
proceeds of the Tender Offer, less any applicable withholding tax (Note), by
remittance or other means instructed by the Tendering Shareholders, etc.
without delay after the commencement date of settlement (remittance fees may
apply.)
(Note) Tax treatment on shares purchased under the Tender Offer
* For specific questions regarding taxation, please consult a tax accountant
or other specialist and make your own decision.
(i) The tax treatment for individual shareholders who tender their shares
in the Tender Offer is as follows.
a) When the Tendering Shareholders, etc. are residents of Japan or
non-residents who have a permanent establishment
If the amount of money received for tendering shares in the Tender Offer
exceeds the amount of MC's capital stock, etc. corresponding to the shares
that are the basis of the receipt (i.e., if the purchase price per share
exceeds the amount of capital stock, etc. per share of MC), the excess portion
("Deemed Dividend Amount") will be deemed to be a dividend and taxed as such.
In addition, the remainder of the money to be received from tendering shares
in the Tender Offer after deduction of the amount deemed to be a dividend will
be classed as income from the transfer of shares and other securities. If
there is no amount deemed to be a dividend (i.e., if the purchase price per
share is less than or equal to the amount of capital stock per share of MC),
the full amount of the money to be received will be classed as income from
transfer.
With regard to the Deemed Dividend Amount, the amount equivalent to 20.315%
(income tax and special reconstruction income tax ("Special Income Tax for
Reconstruction ") under the "Act on Special Measures for Securing Financial
Resources Necessary to Implement Measures for Reconstruction following the
Great East Japan Earthquake" (Act No. 117 of 2011, as amended): 15.315%,
resident tax: 5%) is withheld (non-residents who have permanent establishments
in Japan are not subject to the special levy of the 5% resident tax). However,
if the individual shareholder falls under large shareholders etc. ("Large
Shareholders, etc.") prescribed in Article 4-6-2, Paragraph 38 of the Order
for Enforcement of the Act on Special Measures Concerning Taxation (Law No.43
of 1957 includes revisions after this), the amount equivalent to 20.42%
(income tax and Special Income Tax for Reconstruction only) will be withheld.
In addition, if the combined shareholding ratio of a Tendering Shareholder,
etc. that will receive payment of an amount deemed to be a dividend and a
corporation that falls under the category of a family company under the
Corporation Tax Act when such Tendering Shareholder, etc. is the shareholder
on which the judgment is based is 3% or more of the total number of shares,
etc. issued and outstanding, then such amount deemed to be a dividend is
subject to aggregate taxation.
As a general rule, the amount after deduction of the acquisition expenses for
the shares from income from transfer is subject to separate self-assessment
taxation.
In addition, in the case where shares, etc. held in a tax-exempt account (the
"tax-exempt account") as defined in Article 37-14 (Non-Taxation of Transfer
Income, etc. on Listed Shares with Small Amounts of Dividend Income Held in
Tax-Exempt Accounts) of the Act on Special Measures Concerning Taxation (Act
No. 26 of 1957; including subsequent revisions) are tendered in the Tender
Offer, if the financial instruments business operator, etc. with which such
tax-exempt account is opened is Nomura Securities Co., Ltd., transfer income,
etc. arising from the Tender Offer will be exempt from tax, as a general rule.
The above treatment may differ if the tax-exempt account is opened at a
financial instruments business operator, etc. other than Nomura Securities
Co., Ltd.
b) When the Tendering Shareholder, etc. is a non-resident who does not have
a permanent establishment in Japan
An amount of 15.315% (income tax and Special Income Tax for Reconstruction
only) will be withheld at source on the amount deemed to be a dividend. In the
case of a Large Shareholder, etc., an amount of 20.42% (income tax and Special
Income Tax for Reconstruction only) will be withheld at source. As a general
rule, income arising from such transfer will not be taxed.
(ii) If the amount of money to be received by a corporate shareholder from
tendering shares in the Tender Offer exceeds the amount of MC's capital stock,
etc. corresponding to the shares underlying the delivery, such excess amount
shall be deemed to be a dividend. In principle an amount of 15.315% (income
tax and Special Income Tax for Reconstruction only) will be withheld at source
on the portion deemed to be a dividend.
Any amount deemed to be a dividend to be paid by MC to
Tendering Shareholders, etc. (limited to corporations having their head office
or principal office in Japan (domestic corporations)) who directly own more
than one-third of the total number of issued shares, etc. of MC as of the
record date for the payment of such dividend, etc. will be exempt from income
tax and Special Income Tax for Reconstruction and will not be taxed at source.
Non-Resident Shareholders, etc. who wish to receive income
tax reduction or exemption on such deemed dividend amount in accordance with
applicable tax treaties are requested to submit a tax treaty notification form
to the Tender Offer Agent together with the Tender Offer Application Form when
applying for the Tender Offer.
(7) Other
(i) The Tender Offer will not be conducted, directly or indirectly, in or
targeted at the United States, nor through the U.S. postal mail services or
other interstate or international commercial methods or means (including, but
not limited to, telephone, telex, facsimile, e-mail, and Internet
communication), nor through any stock exchange facilities in the United
States. No tender of shares in the Tender Offer may be made through any of the
aforementioned methods or means, through such stock exchange facilities, or
from the United States. In addition, neither the Tender Office Statement nor
other relevant documents for the Tender Offer will, or may, be sent or
distributed in, to, or from the United States by the postal mail services or
other means. No tender of shares in the Tender Offer that violates, directly
or indirectly, any of the aforementioned restrictions will be accepted. When
tendering shares in the Tender Offer, Tendering Shareholders, etc. (or their
standing proxies in the case of Non-resident Shareholders, etc.) may be
required to make the following representations and warranties to the Tender
Offer Agent. The Tendering Shareholder, etc. is not located in the United
States at either the time of application or at the time of sending the Tender
Offer Application. No information (including copies thereof) relating to the
Tender Offer has been received or sent, directly or indirectly, in, to, or
from the United States. There has been no direct or indirect use of the U.S.
postal mail services or other interstate or international commercial methods
or means (including, but not limited to, telephone, telex, facsimile, e-mail,
and Internet communication) or any stock exchange facilities in the United
States in connection with the Tender Offer or the signing and delivery of the
Tender Offer Application. The Tendering Shareholder, etc. is not a person
acting as another person's agent or fiduciary or designee without
discretionary authority (unless such other person is giving all instructions
with respect to the purchase from outside the United States).
(ii) MC released "Corporate Strategy 2027 " on April 3, 2025. Please refer
to the relevant announcement for details.
(iii) MC released "FY2025 Earnings Forecast and Shareholder Returns" on April
3, 2025. Please refer to the relevant announcement for details.
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